China's economic data for April revealed an uneven recovery path as the nation continues to emerge from the impact of stringent Covid restrictions. The industrial output grew by 5.6%, missing expectations by a large margin but accelerating from a 3.9% gain seen in March.
According to economists surveyed in a Reuters poll, they had expected an increase of 10.9%. Retail sales jumped by 18.4%, falling short of forecasts for a remarkable surge of 21%. Fixed asset investment expanded 4.7% in the first four months of 2023 compared to the same period last year, against expectations of a more robust growth at around 5.5%.
"Although there was some acceleration from March figures, China's economic performance still falls short compared to pre-pandemic levels," said Dr.Liu Yingchun, Professor of Economics at Beijing Normal University.
The uneven recovery is reflected on China stocks that have pared most gains seen this year: The Shenzhen Component has plunged by approximately -4.67% quarter-to-date and risen only slightly with about +1-48% year-to-date.
Economists attribute these disparities primarily due to ongoing efforts containing potential resurgences and cautionary measures imposed across various industries and sectors.
"The government remains vigilant regarding new outbreaks and will continue implementing necessary measures that could potentially affect businesses' operations," says Zhang Weiwei, Head Analyst at Shanghai-based firm Jingyuan Investment Consultancy Co., Ltd.
However, experts believe that despite this uneven progress so far, China's economy may experience further improvements throughout the year as vaccination rates rise countrywide alongside gradual easing restriction policies worldwide boosting export demand.
"We expect continued improvement over time as vaccine coverage expands domestically and globally", says Dr.Wang Xiaoyi from Renmin University School of Economics.
Overall, China's economic data for April demonstrated an uneven path towards recovery. While growth in industrial output, retail sales and fixed asset investment has accelerated from previous months, it still lags behind economists' expectations as the nation grapples with the after-effects of its stringent Covid restrictions.