The Conference Board China Economy Watch (May 2020 Data)
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Economy Watch | China

Monthly updates on the state of the economy in China

The Conference Board China Economy Watch (May 2020 Data)

June 30, 2020 | Brief

  • Impact of COVID-19 Crisis on the Chinese Economy – Stronger than expected momentum in May suggests that Q2 growth will likely be positive. However, aggregate growth will not likely resurge to a pre-coronavirus level until Q4. Risk remains biased toward the downside due to global trade and domestic labor market weakness.

 

  • Investment Trends – Fixed Asset Investment returned to positive growth y-o-y in May. Strong fiscal expansion boosted infrastructure investment, and the loosening credit environment has fueled investment recovery in real estate development. Growth remains weak in manufacturing investment. But, if the industrial output prices’ uptick seen in June continues, and corporate profit growth strengthens as a result, then growth in manufacturing investment may improve in the 2H.

 
  • Consumption Trends – Retail sales growth continued improving in May, with robust recovery in discretionary goods. However, serious job market and consumer confidence concerns cloud the 2H outlook.   

 

  • Trade Trends – Export growth turned negative in May, and the trade environment is likely to get worse before it gets better. Surging demand for pandemic related products has been the one bright spot for China’s export sector, but this will diminish as the pandemic is contained around the world. Global recession will stymie Chinese exports in the 2H.

 

Implications for Business

The most recent data confirm that the Chinese economy continues to r

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AUTHOR

YuanGao

Former Senior Economist, China Center for Economics and Business
The Conference Board


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