China’s Economy Shows Continued Expansion in April, Despite Global Uncertainty and High Unemployment
Zatrun Published at April 26, 2023

China’s economy continued to expand in April, according to high-frequency indicators, although concerns about the strength of the recovery persist due to an uncertain global environment and high unemployment rates. Index of early indicators showed a rise to level 5 in April, mainly due to an increase in car and home sales from a year earlier.

However, comparisons with last year are not entirely accurate since Shanghai was in lockdown at the time, resulting in a slump in economic activity. China’s economy grew at its fastest pace in a year in Q1, and several major banks have raised their growth forecasts for the year to 6% or higher. Nevertheless, many analysts are debating whether policymakers will begin scaling back monetary and fiscal support. If the news caught your attention, continue reading the content below.

High unemployment

China’s growth accelerating to 5.6% this year, up from 5.3% previously. Standard Chartered Plc’s confidence index for small businesses remained above 50 for the third consecutive month in April, indicating that activity continued to expand. In the manufacturing sector, the sub-index for production and sales reached a 16-month high, and new export orders grew. Meanwhile, steel inventories declined in April, suggesting better demand, but broader demand for industrial goods is expected to remain weak.

China’s Economy Shows Continued Expansion in April Despite High Unemployment Rates Among Youth

The strength of consumer spending remains uncertain given high unemployment rates, particularly for young people, and households continuing to boost savings instead of spending. Global trade conditions remained subdued in April, although slightly better than the previous month, with South Korea’s exports declining 11% YoY in the first 20 days of April compared to a nearly 18% drop in March. The extremely low base of comparison last year boosted China’s vehicle and property sales in April.

In conclusion, while China’s economy is showing signs of recovery, concerns about the strength of the recovery persist. Policymakers’ decisions on monetary and fiscal support will play a vital role in the economy’s continued expansion.

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