Global Courant 2023-04-18 19:52:16
SHANGHAI – China’s strong economic growth between January and March 2023 belies continued caution among the Chinese, who are more cautious than before the pandemic, amid concerns about job security and career prospects, especially among recent college graduates.
China’s retail spending rose 5.8 percent between January and March compared to the same period in 2022, but lagged pre-Covid-19 consumption growth rates, economic data released Tuesday showed.
Retail spending in the first quarter of 2019 grew 8.3 percent year-over-year.
The year before, growth for the same period was a whopping 9.8 percent, while Chinese consumer spending continued to run rampant, even as the start of a trade war loomed after then-US President Donald Trump introduced tariffs on all imported washing machines and solar panels in January. 2018.
Year on year, China registered a 10.6 percent increase in total retail goods sales in March.
But despite the stronger-than-expected recovery in consumption, economists noted that China’s overall recovery has been uneven. Factory output grew at a slower 3.9 percent year-on-year in March – compared to 5 percent in March 2022 – as overseas demand slowed.
Analysts attributed March’s robust retail growth rate to the low base effect, given the challenging economic situation in 2022 as China was under unprecedentedly tight lockdowns.
The Chinese economy showed an unexpectedly strong growth of 4.5 percent in the first quarter following China’s dismantling of Covid-19 controls.
But the slower pace of consumption following the pandemic underlines the longer-term challenges China faces in recalibrating its economy so that it is driven more by domestic consumption than by exports.
National Bureau of Statistics spokesman Fu Linghui said during the release of the data on Tuesday that “lack of domestic demand remains prominent and the foundations for economic recovery are not yet solid.”
Residents’ savings have reached an all-time high as domestic spending remains lukewarm, suggesting that “people are not as willing to buy or consume houses,” said chief economist Dan Wang of Hang Seng Bank in Shanghai.
Household deposits in China grew by 9.9 trillion yuan ($1.9 trillion) between January and March 2023 – the amount recorded for all of 2021. In 2022, household deposits reached a record 17.8 trillion yuan.
Tuesday’s data also showed spending on jewellery, considered a safe haven, rose 37.4 percent in March from a year ago.
Economists have pointed to the continued high youth unemployment rate as a factor for weaker consumer confidence as businesses continue to recover from harsh Covid-19 controls, particularly in 2022.
The unemployment rate for those aged 16 to 24 rose to 19.6 percent in March, compared to 18.1 percent in February. Later in 2023, a record 11.58 million students are expected to graduate from higher education institutions.
