A worker makes nylon products for export at a factory in Haian, East China’s Jiangsu Province on Wednesday. With the goal of building a nylon industry base, the city has more than 200 new material companies whose annual output accounts for one-eighth of the country’s total. Local companies are ramping up production to meet domestic and foreign needs. Photo: cnsphoto

China's industrial output, investment and retail sales firmed in April, as the world's second-largest economy entered the second month of its reboot. However, analysts warned that there would be mounting pressure to maintain the momentum given the persisting disruption of the COVID-19 pandemic on the domestic and international economies.

Industrial output turned back to positive territory by growing 3.9 percent in April year-on-year, compared with a contraction of 1.1 percent in March, data from the National Bureau of Statistics (NBS) showed on Friday. The data beats an expected 1.1 percentage point gain.

Urban investment declined 10.3 percent in during January-April period, narrowing from March's 16.1 percent year-on-year plunge.

Retail sales shrank 7.5 percent as consumers returned to streets, restaurants and malls but places like movie theaters remained closed amid the lingering pandemic.

China recently reported better-than-expected data for exports and financial direct investment. All these figures are being closely watched by analysts with the Two Sessions, a major event on China's political calendar during which policymakers will set this year's GDP growth target, scheduled to open next week. 

Liao Qun, chief economist at China CITIC Bank in Hong Kong, told the Global Times on Friday that the April data will be used by policymakers and analysts around the world to gauge the strength of the economy's recovery. 

"China was the first country to emerge from the pandemic and April was the first full month for China's work and production resumption-- but April also saw the global pandemic worsen, so a better-than-expected result will inject confidence into the world economy," Liao said. 

The surveyed unemployment rate weakened by a notch to 6 percent from March's 5.9 percent.

Wan Zhe, chief economist at the China National Gold Group Corp, told the Global Times that retail sales -- a major driver of GDP --had been boosted by local coupon issues that have helped release pent-up demand.

However, analysts stressed that headwinds are likely in the current quarter, given the threat of a resurgence of infections at home and fast-moving overseas outbreaks that are cratering the global economy. 

There are many aspects of the Chinese economy that have not recovered to pre-virus levels. For example, full work and production resumption have yet to be achieved in some localities and sectors. 

In the first quarter, fixed-asset investment contracted by 16.1 percent year-on-year, while retail sales shrank by 19 percent. Both declines, however, narrowed from January-February data. Industrial output shrank 8.4 percent year-on-year in the first quarter. 

Global Times