China's economy is crawling back from its Covid-19 slump, but risk of second wave looms
- Chinese industrial production rose in May alongside a pickup in several economic indicators, according to official data released by the country's statistics authority on Monday.
- The data is the latest sign that the world's second-largest economy is on the road to recovery from the impacts of the coronavirus pandemic.
- A boost in consumer spending sent home and auto sales higher, the National Bureau of Statistics showed, raising optimism that the economy may emerge stronger from its virus hit.
- China's headline jobless rate fell slightly to 5.9% in May, down from April's 6.0% level, in a sign that the economy may have pulled itself together.
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Chinese industrial production rose in May alongside a pickup in several economic indicators, according to official data released by the country's statistics authority on Monday - the latest sign that the world's second-largest economy is on the road to recovery from the impacts of the coronavirus pandemic.
China has been battling the consequences of the coronavirus pandemic, but official data shows its factory activity recovered pace in May as restrictions tied to the Covid-19 outbreak were eased.
However, Beijing reported 57 new coronavirus cases on Sunday - its highest number in two months - and officials have reimposed regional lockdown measures in certain areas.
A line of China's top-tier data fell short of analyst expectations despite month-on-month improvements in fixed asset investment, industrial production, and retail sales, according to Connor Campbell, a financial analyst at SpreadEx, who cited an official spokesman Xu Heijan warning that new risks of a sharper outbreak is "very high."
Chinese consumer spending is a crucial measure for the economy and a boost in purchases in May propelled an increase in home and auto sales.
Retail sales rose by 0.8% in the month compared to April, while falling 2.8% compared to the same time last year. By comparison, in April, retail sales slumped 7.5%.
Big ticket items helped drive retail sales up, with auto sales increasing 3.5% compared to the same period in 2019.
An official gauge of unemployment fell slightly to 5.9% in May from 6.0% in April, improving the economy's headline jobless rate and offering hope that the economy may have passed a critical milestone amid the recent economic downturn.
Total value of industrial production - which measures output in manufacturing, mining, and utilities - expanded 4.4% year-on-year, up from an improved pace of 3.9% in April, the National Bureau of Statistics said.
Fixed asset investment also showed an improvement in May, Chinese authorities said, reporting that it was down 6.3% year-on-year. That was around four percentage points lower than the more than 10% shrinkage witnessed in April.
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