Moderate slowdown in China's economic growth continues

Private consumption has sustained China's growth in recent years. Retail sales, a common measure of private consumption, slowed in April slightly in real terms to just under 8 %. Growth in fixed asset investment (FAI) has also been slowing for a while. Nominal FAI growth in April slowed to just 6 % y-o-y. Even with a moderate inflation estimate of investments, FAI real growth is assumed to be close to zero. Growth in property sales have also slowed this year. In terms of floor space, sales of residential and commercial properties have fallen from last year.

Industrial output growth accelerated slightly to 7 % y-o-y in April. Some observers see the pick-up as temporary, however, as the spurt includes the March lifting of winter restrictions on atmospheric emissions and the subsequent increase in heavy industry activity.

Imports grew faster than exports again in April. In the first four months of the year, the dollar value of imports rose by 20 %, while the value of exports was up by 14 % y-o-y. During the same period, the yuan appreciated over 8 % against the dollar. This resulted in a more modest growth in foreign trade when measured in yuan (exports grew by 6 % and imports by 12 %).

The value of China's foreign currency reserves fell in April by USD 18 billion to USD 3.125 trillion, partly due to exchange rate movements.