While the epidemic is under control in Western countries and the economy and society are gradually opening up, China’s economic growth slowed down in April, with China’s National Bureau of Statistics (NBS) saying that the domestic economy is not yet on a firm footing to recover; and an associate professor at Peking University recently wrote that European and American countries were hit harder by the epidemic than China, but social assistance has curbed a significant and sustained rise in local unemployment.
China’s National Bureau of Statistics (NBS) released its main economic indicators for April on May 17, with year-on-year growth in industry, investment and consumption falling back significantly compared to March.
The National Bureau of Statistics said that the foundation of China’s domestic economic recovery is not yet solid, the change of the epidemic makes the world economic recovery prospects face uncertainties, coupled with the domestic economic recovery process is still unbalanced, the overall economic development of “new situations, new problems”.
Foreign epidemic, domestic inflation become new problems for China’s economy
National Bureau of Statistics spokesman Fu Linghui said at a press conference: “From the international point of view, mainly in some countries, the epidemic has emerged new changes, which may have some negative impact on the prospects for the recovery of the world economy. From the domestic point of view, mainly or short-term international commodity prices, the price of raw materials for some domestic upstream industries, may bring some pressure on the production and operation of some enterprises downstream.”
Official data showed that total retail sales, the main measure of domestic consumption indicators, rose 17.7% year-on-year in April, well below the 34.2% increase in March and the expected value of 24.9%, while the value added of industries above national scale rose 9.8% year-on-year in April, down from 14.1% in March. Last month the National Bureau of Statistics released economic data for the first quarter of 2021, in which gross domestic product (GDP) grew 18.3 percent year-over-year, the highest growth rate since China began publishing quarterly Chinese GDP data in 1992.
Yu Wei-hsiung, an economist at the Anderson Center for Economic Forecasting in Los Angeles, told the station that he was “not surprised” by the latest data, saying he sees many potential problems with China’s economy, including inflation and financial regulations that affect people’s willingness to spend.
“I’m not surprised by this data, which means that China’s consumption power is not as good as we thought.”
According to data released last week by the National Bureau of Statistics, the Consumer Price Index (CPI) rose 0.9% year-on-year in April, a rise that was the highest in nearly seven months, while the Producer Price Index (PPI) rose 6.8% year-on-year in April, the largest monthly increase since October 2017, with both indicators rising to suggest an increased risk of inflation.
China’s producer price index will continue to climb, as global supply chain disruptions, coupled with a rebound of new crowns in some emerging markets, have caused commodity prices to show a rise, which in turn squeezes the profits of Chinese producers, according to an analysis by economists cited by the Wall Street Journal.
Investment in China’s manufacturing sector in the first quarter of this year is still only equal to ninety-six percent of the pre-epidemic level (Reuters file photo)
Scholar: Official unemployment rate not credible
Zhang Dandan, an associate professor of economics at the National Development Institute of Peking University, recently wrote an article pointing out that European and American countries were hit by the new epidemic, but because the government focused on social assistance and introduced many policies related to saving jobs, the economic investment in fighting the epidemic was mainly reflected in unemployment subsidies, thus effectively controlling the local unemployment rate; while China paid attention to the control of the epidemic to protect the whole economy, and did not focus on unemployment subsidies or social assistance in a relatively single way.
The reporter compared the official unemployment rate data of the two countries. According to the U.S. Bureau of Labor Statistics, the unemployment rate reached a peak of 14.8% at the beginning of the outbreak in April 2020, and then slowly decreased to 6.9% in October last year, and the unemployment rate has not increased or decreased significantly since this year, maintaining about 6.1%.
China’s urban survey unemployment rate peaked at 6.2% in February 2020 and has been gradually decreasing since then; China’s Bureau of Statistics also released the latest unemployment rate data on the 17th, with the urban survey unemployment rate at 5.1% in April, down 0.2% from March and 0.9% lower than the same period last year.
However, Yao Yang, director of Peking University’s National Development Institute, said late last year that according to an unofficial survey they conducted, China’s unemployment rate was as high as 15%, with another 5% in semi-unemployment, projecting China’s unemployed population to be in the hundreds of millions, significantly higher than the official statistics.
Yao Yang, director of Peking University’s National Development Institute, said at a seminar that their survey showed that 20 percent of the population is unemployed or semi-unemployed.
Xie Tian, a business professor at the University of South Carolina, told the station that official Communist Party figures do not reflect the real situation. The U.S. closed many factories at the beginning of the outbreak, causing unemployment to rise high, although China also had moves to close cities, but no relevant policies were seen reflected in economic indicators.
“The Chinese Communist Party first systematically falsifies not only on the issue of unemployment, but also inflation, consumer price index, economic growth, all of which are false, which is not credible.”
According to Xie Tian, the economy of many countries around the world is now gradually recovering and market demand is increasing, which will benefit some of China’s product exports, although many countries are gradually moving their industrial chains out to reduce their dependence on China, which will continue to affect China’s economy in the future, I’m afraid.
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