China Industrial Spurt Risks Sowing Complacency
By: Asia Economics Correspondent
China’s economic growth in the first two months of the year has shown promising signs in industrial production and fixed-asset investment. However, concerns loom over the sustainability of this growth and the impact on the broader economy.
The recent surge in industrial production, marking the fastest pace in two years, and a significant jump in fixed-asset investment have sparked optimism. Private-sector investment also rebounded after an eight-month slump, while retail sales, although not explosive, met economists’ forecasts.
Despite these positive indicators, there are growing concerns about complacency among policymakers. State media reports have indicated contentment with the current economic data, raising doubts about the urgency for further stimulus measures.
However, underlying issues persist, particularly in the household sector. The real-estate market continues to be a drag on the economy, with property sales declining by 20%. Additionally, the job market poses challenges, with the unemployment rate for the younger population reaching 15.3% last month.
These economic challenges are further exemplified by declining consumer demand. TV sales, for instance, have seen a notable downturn, dropping from over 50 million units five years ago to 37 million units last year.
While China’s industrial sector shows promise, the broader economy faces significant headwinds. The juxtaposition of strong industrial growth and underlying weaknesses in the household sector underscores the complexity of China’s economic landscape.
