7 Aug 2017
China Trade Quarterly - Domestic and Foreign (Issue 47)
Retail sales of consumer goods reached 17,236.9 billion yuan in 1H17, up by 10.4% yoy. Online retail sales of goods, which accounted for 13.8% of total retail sales, rose strongly by 28.6% yoy over the period.
Ex-factory prices of industrial products have trended downward. The producer price index of industrial products slid 0.2% mom, dropping for the third consecutive month in June.
Both rural and urban households saw high single-digit growth in income in 1H17: The per capita disposable income of rural households grew nominally by 8.5% yoy to reach 6,562 yuan; while that of urban households rose by 8.1% yoy in nominal terms to reach 18,322 yuan in 1H17.
Growth in nominal fixed asset investment accelerated to 8.6% yoy in 1H17 from 8.1% yoy in 2016, driven by the investment in infrastructure, the secondary industry and real estate development.
Gross merchandise volume of China's internet consumption finance market reached 436.7 billion yuan in 2016, up markedly from 6 billion yuan in 2013, according to iResearch.
Chinese entrepreneurs in the secondary industry remained optimistic in 2Q17. The Entrepreneur Confidence Index for the secondary industry recorded 127.3 in 2Q17.
PMI fluctuated within a narrow range of 51.2 to 51.7 throughout April to July, showing that the growth in manufacturing and economic activities in China has largely stabilized.
Non-manufacturing sector has expanded at a relatively fast pace lately. After going up from 54.5 in May to 54.9 in June, the second highest level this year, the NMI moderated to 54.5 in July.
Both exports and imports posted strong growth in 2Q17. Exports gained 9.1% yoy, while imports expanded by 14.5% yoy in the quarter.
Exports to the US, the EU, Japan and the ASEAN gained 12.6% yoy, 9.2% yoy, 6.2% yoy and 9.5% yoy respectively in 1H17. Exports to some commodity-exporting emerging countries posted robust growth: Exports to Brazil and Russia increased by 39.4% yoy and 22.2% yoy respectively in 1H17.
Four provinces in the western region witnessed robust year-on-year growth in exports in January to May: Exports from Sichuan, Shaanxi, Qinghai and Xinjiang surged by 30.2% yoy, 36.1% yoy, 124.1% yoy and 30.5% yoy respectively over the period.
FDI dropped slightly by 0.1% yoy to 441.5 billion yuan in 1H17. FDI in the manufacturing sector accounted for 29.1% of the total FDI in 1H17. Among industries, FDI in the 'general equipment' industry, the 'petrochemical engineering, coking and nuclear fuel' industry and the 'chemical raw material and chemical product' industry grew at a relatively fast pace, by 14.4% yoy, 329.4% yoy and 38.4% yoy respectively, over the period.
Foreign exchange reserves increased by US$ 47.7 billion in 2Q17, recording the first positive quarter-on-quarter gain in twelve quarters. As at the end of June, the foreign exchange reserves amounted to US$ 3,056.8 billion.
The Chinese yuan has appreciated against the US dollar, but has depreciated against the Euro in recent months. The daily fixing rate of the Chinese yuan against the US dollar strengthened from 6.9066 on 10 May to 6.7283 on 31 July; the daily fixing rate of the Chinese yuan against the Euro depreciated from 7.3025 on 17 April to 7.9059 on 31 July, the weakest level since mid-September 2014.
China's first Belt and Road Forum held on 14-15 May drew worldwide participation. Around 1,500 delegates from more than 130 countries and 70 international organizations, including 29 foreign heads of state and government, attended the forum. During the forum, Chinese President Xi Jinping and 29 other heads of state and government signed a joint communique, reaffirming their commitment to building an open economy, ensuring free and inclusive trade, and promoting a universal, rules-based, open, non-discriminatory and equitable multilateral trading system with WTO at its core.
China and the US held the first Comprehensive Economic Dialogue in Washington on 19 July. During the meeting, both China and the US agreed that, to tackle the problem of trade imbalance, the US has to increase its exports to China, instead of reducing its imports of Chinese products.
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