1 Aug 2016
China Trade Quarterly (Aug 2016)
Retail sales of consumer goods reached 15,613.8 billion yuan in 1H16, up nominally by 10.3% yoy. Online retail sales of goods, which accounted for 11.6% of total retail sales, surged by 26.6% yoy in the period.
Growth in fixed asset investment fell to 9% yoy in 1H16, mainly dragged down by a deceleration in growth in investment in the secondary industry.
Prices of production inputs have been rising. The purchaser price index of industrial products went up by 0.2% mom in June, posting month-on-month gains for four consecutive months.
Household income showed high single-digit growth in 1H16. The per capita disposable income of households in China increased nominally by 8.7% yoy to 11,886 yuan in 1H16. Rural household income grew faster than urban household income over the period.
Ministry of Commerce will carry out tasks to support the development of e-commerce. The tasks include fostering innovation in policies, institutions and services in thirteen cross-border e-commerce comprehensive pilot areas and promoting replicable practices nationwide, pushing forward negotiations on free trade agreements in areas of e-commerce, enhancing the development of e-commerce credit system, and formulating the 13th Five-Year Plan on e-commerce.
Confidence among Chinese entrepreneurs in the secondary industry improved for the first time in five quarters. China’s Entrepreneur Confidence Index for the secondary industry rose by 0.6 pts from the previous quarter to 109.3 in 2Q16.
July PMI shows signs of contraction of the manufacturing sector. The PMI came in at 49.9 in July, falling below the critical 50-mark for the first time since March this year.
Non-manufacturing sector has expanded at a relatively fast pace in recent months. The NMI rose from 53.1 in May to 53.7 in June and 53.9 in July, the highest level since January this year.
Both exports and imports dropped at a slower pace in 2Q16. China’s exports contracted by 4.6% yoy in 2Q16, after falling by 9.6% yoy in 1Q16. China’s imports posted a single-digit drop of 6.8% yoy in 2Q16, compared to the 13.5% yoy fall in 1Q16
Exports to the US, the EU and Japan fell by 9.9% yoy, 4.4% yoy and 6.1% yoy respectively in 1H16. In contrast, exports to Russia and India managed to register positive growth of 10.0% yoy and 1.8% yoy respectively in the same period.
All top six provinces/ municipalities in terms of exports witnessed negative year-on-year growth in exports in the first five months of this year. Among these provinces, Shanghai saw the sharpest fall in exports (minus 9.0% yoy) in the January - May period.
FDI grew by 1.6% yoy to reach US$ 69.4 billion in 1H16. The share of the service sector in the total FDI went up to 70.5%, while the share of the manufacturing sector fell to 28.1%, in 1H16.
Foreign exchange reserves posted a smaller drop in 2Q16. China’s foreign exchange reserves fell by US$ 7.4 billion in 2Q16, amounting to US$ 3.21 trillion as at the end of 2Q16.
Chinese yuan depreciated against its trading partners by 5.5% in real terms in the first half of this year, according to the Bank for International Settlements.