China’s economy deteriorated faster-than-expected in April amid covid outbreaks and the stringent lockdowns.
China’s National Bureau of Statistics released a series of economic indicators at 12:00 pm AEST, including (all figures are year-on-year):
Industrial output fell -2.9%
Missed estimates of a 0.5% gain
Lowest reading since February 2020
Retail sales tumbled -11.1%
Wider-than-expected decline compared to estimates of -6.6%
Lowest reading since March 2020
Fixed-asset investment rose 6.8%
Missed estimates of a 7% increase
Measures expenditure on infrastructure, property, equipment and machinery
Urban unemployment rate of 6.1%
Does not include figures for migrant workers
Covid peak was 6.2%
To add further insult to injury, China flagged that its real estate sector remains in a state of decline:
Home sales value -32.3%
Home sales area -25.4%
Property sales value -20.5%
Property sales area -20.9%
New property construction -26.3%
On the commodity front:
Domestic coal production of 362.8m tonnes, up 10.7%
Coal imports of 23.55m tonnes, up 8.4%
Crude steel production of 92.8m tonnes, down -5.2%
The S&P/ASX 200 was already pulling back from intraday highs in the lead up to China's economic news.
When the numbers came out, the ASX 200 briefly fell to breakeven for the day, from an intraday high of 1.05%.
The selloff was headlined by miners that are dependent on China's economic growth.
A rapidly deteriorating China could deter the US Federal Reserve from a more hawkish path for interest rates.
China has also laid out plans to relax the harsh lockdowns in Shanghai.
According to Vice Mayor Zong Ming:
Shanghai to fully resume normal orders of production and life by mid-to-late June
Shanghai will gradually resume rail and bus services from May 22
No community covid spread in 15 of 16 districts
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