17 May 2017
China Trade Quarterly (Issue 46)
Retail sales of consumer goods reached 8,582.3 billion yuan in 1Q17, up nominally by 10.0% yoy. Online retail sales of goods, which accounted for 12.4% of total retail sales, rose strongly by 25.8% yoy over the period.
Uptrend of ex-factory prices of industrial products has reversed recently. For the first time in ten months, the producer price index of industrial products recorded a drop, down by 0.4% mom in April.
Consumption expenditure of both rural and urban households showed high single-digit growth in 1Q17: the per capita consumption expenditure of rural households increased nominally by 8.1% yoy to reach 2,921 yuan; while that of urban households grew by 7.0% yoy in nominal terms to reach 6,387 yuan in 1Q17.
Growth in nominal fixed asset investment rose to 9.2% yoy in 1Q17 from 8.1% yoy in 2016, due largely to the acceleration in the growth in investment in the manufacturing sector, the real estate development and the infrastructure.
Government will take a series of measures to boost consumption this year. For example, the government will continue to push forward the ‘10 initiatives for boosting consumption’; foster the integrated development of brickand-mortar stores and online shopping; and ensure that more domestically sold products come off the same production lines, meet the same standards, and are of the same quality as export products.
Macroeconomic targets set for 2017. During the fifth session of the 12th National People’s Congress, the government set a real GDP growth target of about 6.5% for 2017, compared to the actual growth rate of 6.7% in 2016 and the 6.5% - 7.0% growth target set for 2016.
Entrepreneur Confidence Index for the secondary industry rose markedly by 13.8 pts in 1Q17, indicating a great improvement in confidence among Chinese entrepreneurs in the secondary industry in the quarter.
April PMI indicates a growth moderation of the manufacturing sector. PMI went down to 51.2 in April from 51.8 in March, the highest level in almost five years.
Both exports and imports continued to post year-on-year gain in April. Exports rose by 8.0% yoy, while imports expanded by 11.9% yoy in the month.
Exports to the US, the EU, Japan and the ASEAN grew by 10.0% yoy, 7.4% yoy, 4.8% yoy and 11.4% yoy respectively in 1Q17. Exports to some commodity-exporting emerging countries posted robust growth in 1Q17: the exports to Brazil and Russia increased by 35.8% yoy and 22.4% yoy respectively in 1Q17.
Exports from Guangxi, Shaanxi, Qinghai and Xinjiang showed stunning growth, up by 34.6% yoy, 35.3% yoy, 56.3% yoy and 50.3% yoy respectively in 1Q17.
FDI grew by 1.0% yoy to reach 226.5 billion yuan in 1Q17. The share of the service sector in China’s total FDI went up to 73.0% in 1Q17 from 70.3% in 2016. Among the industries, FDI in the ‘transportation, warehousing and postal industry’ and the ‘rental and commercial service industry’ posted rapid growth of 43.7% yoy and 62.3% yoy respectively in 1Q17.
Foreign exchange reserves have bottomed out recently. For the first time in eight months, foreign exchange reserves in February recorded month-on-month gain, up by US$ 6.9 billion. Then, foreign exchange reserves increased by US$ 4.0 billion and US$ 20.4 billion respectively in March and April.
Exchange rate of the Chinese yuan against the US dollar has stayed relatively stable in recent months. The daily fixing rate of the Chinese yuan against the US dollar has stabilized in a range between 6.8456 and 6.9125 since late January (as of 12 May).
Xi-Trump summit in early April seemed successful. After the meetings, Trump said he and Xi had ‘developed a friendship’, while Xi said he had established a good working relationship with Trump. In addition, at Xi’s invitation, Trump will pay a state visit to China later this year. Besides, China and the US announced to establish four high-level dialogue mechanisms, including the Diplomatic and Security Dialogue, the Comprehensive Economic Dialogue, the Law Enforcement and Cybersecurity Dialogue, as well as the Social and Cultural Dialogue.
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