China’s economy shows signs of struggle with rising unemployment and falling housing prices despite a 4% increase in retail sales. The NBS reported a 5.4% urban unemployment rate, the highest in two years. The country faces pressures from a trade war with the U.S. while aiming for a 5% growth target.
Recent data from the Beijing National Bureau of Statistics (NBS) has revealed mixed signals regarding China’s economic health. Retail sales—a crucial indicator of consumer sentiment—rose by four percent year-on-year for January and February, suggesting some positive developments in consumption.
Nonetheless, the NBS also reported concerning trends, such as rising unemployment and declining housing prices in major cities. Specifically, the surveyed urban unemployment rate increased to 5.4 percent in February, surpassing both market expectations and indicating the highest level of unemployment in two years. The property sector has also shown signs of distress, with a decrease in housing prices in 68 out of 70 cities.
Additionally, while industrial production saw a year-on-year rise of 5.9 percent, this figure marks a slowdown from the previous month’s 6.2 percent growth. In response to these challenges, the Chinese government has set a growth target of five percent for the year, matching last year’s goal, which many economists view as ambitious given current economic conditions.
The ongoing trade war with the United States under President Donald Trump has exerted further pressure on China’s economy. With significant tariffs imposed on Chinese exports, the Chinese authorities are now focusing on boosting domestic consumption to lessen reliance on exports. NBS spokesman Fu Linghui acknowledged during a news conference that the international business environment will become increasingly complex. The government has proposed an action plan to stimulate low consumer demand, which includes education subsidies and reforms in the housing sector.
In summary, while there are positive developments in retail sales, China faces significant challenges, including rising unemployment and a struggling property market. The impacts of the trade war with the United States further compound these issues, pushing officials to prioritize domestic consumption. The government’s proposed measures may provide some support, but overall, the economic landscape remains uncertain.
Original Source: m.economictimes.com
