The record high growth rate of consumption in May highlights the economic resilience
The main engine of China's economy has hit the acceleration button.
Who is actually "stepping on the gas" in this wave of consumption acceleration?
Luo Zhiheng, chief economist of Guangdong Kaixin Securities, told Sanlihe that the significant boost in consumption is mainly due to the continuous implementation of the policy of exchanging old consumer goods for new ones, coupled with the promotional activities on various platforms that have stimulated residents' enthusiasm for consumption.
The policy of exchanging old for new has made significant contributions. Under the continuous implementation of policies, the retail sales of household appliances, audio-visual equipment, communication equipment, cultural and office supplies, and furniture in units above the designated size have all seen a significant increase, rising by 53.0%, 33.0%, 30.5%, and 25.6% respectively.
These goods collectively contributed to the growth of total retail sales of consumer goods by 1.9 percentage points, an increase of 0.5 percentage points compared with the previous month.
The growth of consumption has accelerated, and related service industries have also benefited. In May, the production indices of wholesale and retail trade and accommodation and catering services accelerated by 1.6 and 0.9 percentage points respectively compared with the previous month. The gears of the economic cycle are accelerating under the drive of consumption.
The early launch of the "6·18" online shopping promotion, combined with the policy of trading in old consumer goods for new ones, has accelerated the sales of online retail goods. From January to May, the online retail sales of physical goods increased by 6.3% year-on-year, which was 0.5 percentage points faster than that from January to April.
The holiday economy also added fuel to the acceleration of consumption. During the May Day holiday, 314 million domestic trips were made across the country, an increase of 6.4% year-on-year. Domestic tourists spent a total of 180.269 billion yuan on travel, an increase of 8.0% year-on-year.
Wen Bin, chief economist of China Minsheng Bank, analyzed that the current domestic economic operation can roughly be divided into three main lines: the first is exports under the tariff war, the second is investment and consumption stimulated by policies, and the third is the endogenous driving force of economic growth. Judging from the situation in May, consumption stimulated by policies has become the biggest highlight.
Beyond consumption, under the pressure of the tariff war, exports have demonstrated extraordinary resilience and have not "fallen" as some people feared.
In May, foreign trade continued to withstand pressure and maintained steady growth. The total volume of imports and exports of goods increased by 2.7%, and exports rose by 6.3%, demonstrating strong international competitiveness and resilience.
More importantly, expectations are improving. The Purchasing Managers' index (PMI) for the manufacturing sector rose by 0.5 percentage points in May compared with the previous month, among which the production index entered the expansion zone. The business activity index of the service industry stood at 50.2%, remaining in the prosperous range for three consecutive months.
China has a well-stocked policy toolkit and leaves room for macro policies, which can be dynamically adjusted and proactively responded to in light of changing circumstances. The remarks made by the National Bureau of Statistics have reassured the market and also revealed the confidence for China's economy to move steadily and far.
From the roar of the consumption engine to the demonstration of export resilience, coupled with the continuous growth of new growth drivers, every policy implemented and every set of data surging are laying a solid foundation for the high-quality development of China's economy.
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