Expert: China growth to top 5% on consumption, exportsーNHK WORLD-JAPAN NEWS
Let’s look at the topics we’ll track in the week ahead. On Tuesday, the world’s number two economy will release its GDP figures for the April to June quarter. That’s followed by inflation data from the US and Japan. Now, China’s economic growth for the first quarter beat forecasts. It expanded by 5.4% above the government’s target of around 5%. Factory output was healthy and consumer demand was solid. The start of additional tariffs in April had exporters rushing to ship goods to the US before the levies went into effect. The question now is if the momentum continued into the next quarter. Saito Naoto of Da Institute of Research says growth likely slowed in the April to June period but still met or exceeded the government target. I believe that China’s real GDP growth for the April to June period will likely be over 5%. Consumption and net exports are seen to have driven growth. For consumption in particular, subsidies to boost consumer spending have been extremely effective. Incentives to buy household appliances have doubled since last summer and new subsidies started for communications devices this year. Sales are strong in both categories. Silaitto notes the subsidies are finite and consumers are rushing to take advantage of them. He says exports have continued to grow despite Trump’s tariffs. It’s true that exports to the US have dropped sharply, but exports to the ASEAN and European countries have grown rapidly and more than compensated for the drop in traffic to the US. But the shipments to ASEAN nations are believed to include roundabout exports that are ultimately headed to the United States. At the same time, imports are on the decline. Psycho says Chinese consumers are opting to buy domestically made products instead of those from abroad amid rising trade friction with the US. That’s led to an increase in net exports. Seaitto predicts China’s economic growth will slow in the second half of the year. He anticipates GDP growth below 5% for both the third and fourth quarters. Once people have purchased cars and major appliances, they usually don’t buy new ones until several years later. So, this demand is front-loaded. A pullback could be seen around September. Another point to consider is how Trump’s tariffs will affect the situation going forward. I think we can’t be too optimistic. Indications are that the growth rate will gradually fall. Cait adds that Beijing hasn’t been able to come up with ways to fix structural problems such as high youth unemployment and a prolonged real estate slump. He says these are additional factors that may slow growth. I’m Yanaka Marie and that wraps it up for this week’s Biz Pick.
China’s GDP grew 5.4% in the first quarter as incentives boosted spending and exports surged ahead of US tariffs. An expert sees the trend continuing in the three months to June. #usa #politics #economy #china #europe #trade #business
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