An employee works on an automated production line at a textile factory in Hai'an, East China's Jiangsu Province, on Thursday. The local government is encourages intelligent and innovative transformation of the textile industry. Last year, 234 industrial companies in the city generated more than 40 billion yuan ($5.6 billion). Photo: IC

 

China's industrial output, investment and retail sales continued to rebound in May, the second full month after the world's second-largest economy resumed work and production as the worst of the coronavirus epidemic had passed in China. However, weakening recovery momentum underlined the difficulty of a complete economic reboot.

All three major economic indexes recovered from a steep decline in the first quarter. The data are closely watched as analysts use them to help gauge the extent of manufacturing and consumer recovery while China eases lockdowns.

Industrial value added grew 4.4 percent year-on-year in May, compared to a 3.9 percent rise in April, data from the National Bureau of Statistics (NBS) showed on Monday. That was less than the expected 5 percentage point gain.

Urban fixed-asset investment declined 6.3 percent in the first five months, narrowing 4 percentage points from the reading for the first four months. 

The decline in retail sales in May narrowed, shrinking 2.8 percent as consumers returned to streets, restaurants and malls. Auto sales also regained traction, with the decline narrowing 4.7 percentage points from April.

The NBS said in a statement posted online on Monday that China's economic performance in May continued to improve from April's, but that the extent of the recovery in industrial production and consumption is losing steam and export-oriented industries are seeing contractions due to weak overseas demand.

Wan Zhe, chief economist at the China National Gold Group Corp, told the Global Times on Monday that a continued narrowing of deceleration in investment and retail sales shows China's work and production resumption is being carried out in an orderly fashion, and China is one step ahead of other developed and developing countries on the path to economic recovery amid the COVID-19 pandemic. 

"The newly released data are weaker than expected. This shows lingering pressure on a full recovery in consumption and suggests some of the earlier predictions are too optimistic," Wan said. 

The NBS press conference shifted from offline to online at the last minute as a sudden outbreak of COVID-19 infections struck a wholesale food market in a Beijing district over the weekend. 

Analysts have warned there will be mounting pressure to maintain momentum given the persisting impact of the COVID-19 pandemic on the domestic and international economies, from the perspective of a globalized industrial chain.

Wan urged the government to enact more measures to alleviate difficulties faced by the country's vast number of small and medium-sized enterprises, which have a crucial role in maintaining jobs and people's incomes.