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Beijing cuts incentives, sales and production are slowing down

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Beijing is holding back on incentives and credit: for this reason the positive data recorded in April must be compared on a monthly basis. In absolute figures and in line with forecasts, Chinese industrial production grew by 9.8% in April, however less than 14.1 in March. Ditto for retail sales + 17.1% much weaker than the 24.9% increase predicted by analysts and down from the 34.2% jump in March. Industrial production grew by 9.8%, against 14.1% in March. The unemployment rate recorded stood at 5.1% in April, from 5.3% the previous month.

Data undergoing seasonal adjustment

Investments in fixed assets also increased by 19.9% ​​in the first four months compared to the same period of the previous year, against an expected increase of 19.0%, slowing down from + 25.6% in January-March. A growth that follows the lines of that of the other indicators disseminated by the National Statistical Institute.

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The recorded increases must necessarily pass through the analysis of seasonally adjusted data. In fact, the distortions linked to the decline in Covid-19 last year remain and, above all, Beijing is abandoning the path of incentives to support the economy also on the credit side.

On this basis, momentum in the industry continued to subside, with production growth falling from 0.6% to 0.5%, the slowest pace since last year’s pandemic. The survey data suggests that the reason is partly related to bidding constraints. The increase in production and consumption was a little stronger, but on the contrary it risks falling even below the levels prior to the pandemic.

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Month-over-month, sales growth fell well below the pre-pandemic pace: average monthly growth in 2019 was 0.7%.

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