Under the pressure of the official “clearing” epidemic prevention policy, the future economic prospects are not good. (Image credit: Getty Images)
[See China, September 20, 2022](See a comprehensive report by Chinese reporter Li Zhengxin) China’s official economic data shows that in August, data such as the added value of industrial enterprises above designated size rebounded slightly. However, researchers pointed out that with weak real estate and foreign trade exports, and under the weight of the official “clearing” epidemic prevention policy, the future economic prospects are not good.
According to the latest August economic data released by the National Bureau of Statistics of China, the added value of industries above designated size increased by 4.2% compared with the same period last year, which is the fastest growth rate since March this year. The retail sales of consumer goods reached 3,625.8 billion yuan, a year-on-year increase of 5.4%, the fastest growth rate in six months.
According to a press release published on the website of the National Bureau of Statistics of China, “The national economy continued to recover, with major indicators generally improving, industrial production rebounded, equipment manufacturing grew rapidly, the service industry continued to recover, the modern service industry grew well, and market sales recovered. Accelerating, the cumulative growth rate of total retail sales of social consumer goods has changed from negative to positive…”.
Song Weijun, a researcher at the overseas think tank “Tianjun Politics and Economics”, believes that the official data seems to have improved slightly, but the issue of the base and data moisture of last year must also be taken into account. For example, China’s national industrial added value above designated size in August increased by 4.2% year-on-year. In August 2021, the added value of industrial enterprises above designated size increased by an average of 5.4% in two years, so the base number needs to be considered. However, there has always been moisture in China’s official data, which is a consensus among various research institutions.
Song Weijun pointed out that although there has been an increase in social financing, from the perspective of overall economic fundamentals, it is more like a flash in the pan, because this is the performance of the official adoption of loose money and the executive order requiring financial institutions to increase lending. Under the influence of the intensified real estate recession, weak exports and adherence to the “zero-clearing” epidemic prevention policy, the epidemic prevention policy has a great lethal effect on the economy, and economic activity is expected to be sluggish in the next few months.
According to Deutsche Welle, Capital Economics China economist Julian Evans-Pritchard analyzed August economic data and said: “This is because the base of comparison (August last year) is low.”
While the current upbeat data has cleared some of the gloom over China’s sluggish economy, Evans-Pritchard doesn’t think the momentum will continue into September.
On September 19, according to CNBC, Wang Tao, chief China economist at UBS, said in a report: “Although some current policy support will achieve more results in the fourth quarter, the new crown epidemic may be in winter and early 2023. It remains challenging and export growth will slow.”
UBS lowered its full-year 2022 growth forecast for China’s economy to 2.7% from 3% and its full-year growth forecast for 2023 to 4.6% from 5.4%.
Wang Tao added that the revised forecast for 2023 is still based on the fact that the property market will soon stabilize and the “zero” policy restrictions on the new crown epidemic will be eased from March.
However, these “zeroed out” containment measures have weighed on investor sentiment and are unlikely to rebound anytime soon, Marty Beckink, China director of the Economist Intelligence Unit’s corporate network, said on CNBC’s “Squawk Box Asia” .
“We don’t see policy levers being pulled to facilitate change,” she said of China’s “zero-and-zero” epidemic prevention policy, “destroying investor confidence in China.”
In addition, economists also expect the yuan to continue to weaken even after both onshore and offshore renminbi fell below the important “7” mark against the dollar last week.
“We expect the yuan to remain weak in the near term, in part due to a generally stronger dollar,” Goldman economists said in a note, with the next key level to watch at 7.20.
Source: Watch China
Short URL for this article:
All rights reserved, any form of reproduction is subject to the authorization of China. It is strictly forbidden to create mirror websites.
[Honorary Member Wanted]Streams can merge into the sea, and small kindness can achieve great love. We sincerely solicit 10,000 honorary members from Chinese people all over the world: each honorary member only needs to pay a subscription fee every year to become an honorary member of the “Watch China” website. Provide independent and true key information, warn them in times of crisis, and save them from the great plague and other social crises.
