Problems continue in the Chinese economy

The economic indicators for October in China, the second largest economy in the world, reveal that the difficulties of recovery after Covid-19 continue in the areas of production, consumption, investment and employment.

The National Statistics Office (UIB) announced the set of data consisting of industrial production, retail sales, fixed capital investments and unemployment figures corresponding to October and the first 10 months in the country.

Consequently, although signs of recovery in production and consumption continued in October, the decline in real estate investments continued its negative impact on economic growth.

INVESTMENT STAGE

Industrial production, which calculates the output of industrial enterprises with an annual turnover of more than 20 million yuan (about 2.76 million U.S. dollars), increased by 4.6 percent year on year in October, above the increase in the 4.5 percent in September.

Retail sales, which are considered the measure of consumption, rose 7.6 percent annually in October, outpacing the 5.5 percent increase in September.

The increase was driven by increased spending during the long holiday period in early October, when National Day coincided with the Mid-Autumn Festival.

On the other hand, although investments in fixed capital, which include expenditures on infrastructure, real estate, machinery and equipment, increased by 2.9 percent annually in 10 months, they remained below the 3.1 percent increase in nine months.

Private sector investments among fixed capital investments decreased by 0.5 percent in 10 months.

PROBLEMS IN THE REAL ESTATE SECTOR GROW

Although the decline in investments in the real estate sector continues, where debt problems are increasingly deepening, this situation also reduces investments in fixed capital.

The contraction of real estate investments, which was 9.1 percent in nine months, increased to 9.3 percent in the January-October period.

UNEMPLOYMENT

In October, the overall unemployment rate was 5 percent, maintaining its level in September.

The youth unemployment rate, which has reached record levels in the past two years, was also not announced this month.

The Chinese economy recorded annual growth of 4.5 percent in the first quarter, 6.3 percent in the second quarter and 4.9 percent in the third.

Although the government’s growth target of “around 5 percent” for this year appears achievable, structural and periodic problems in the economy are seen continuing. (AA)