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Macro Economy

Monthly Review on Macro-Economic Performance (No.4, 2018)


Issue No.4, 2018 (Total 100)


The economic performance in May witnessed some fluctuations and the decline of domestic demand growth had caused serious concern. In May, the industrial added-value increased by 6.8% year on year, down slightly by 0.2 percentage points compared with the previous month. The growth of industrial electricity consumption increased prominently. The market-based investment kept playing an active role with private investment continuing a relatively high growth and that of the investment in the manufacturing industry maintained a relatively strong momentum. The growth of export (in US dollar) continued to maintain a stable increase, down by 0.1 percentage point compared with April. CPI increased steadily, PPI inched up slightly and the general performance of price was moderate. As the effect of de-leveraging became enhanced and the business of shadow banks became narrowed, market development maintained stable. The growth rate of both the increment and the stock of debt in non-financial sectors dropped to some extent and the volume of private financing went down while its prices surged up and its monthly increment had hit a new low since November 2016. It should be noted that the actual growth of consumption in May was 6.8%, falling to the lowest since 2004: the growth of investment from January to May had fallen by 0.9 percentage points compared with that from January to April, a continued decline for three consecutive months. In the future, it is estimated that the growth of infrastructure construction and real estate investment will continue to slow down, and the increase of domestic demand may encounter further downward pressure. What should be stressed is that the current decline of domestic demand is the result of government policy measures including de-leveraging, debt control, strict supervision and enforced environmental protection. The overall stability of economic fundamentals has not changed, thus we should not be disturbed by some opinions calling for loosing policies from the market and the direction of de-leveraging should not be adjusted. It should be added that the trade tension between China and the U.S. tends to become escalated and the fluctuation of international demand might become volatile. Therefore, work needs to be done to uphold the overall principle of seeking progress while keeping performance stable and stick to a high-quality development as the fundamental requirement. On the other hand, the macro-economic policies should maintain flexibility and take all factors into overall plan, precisely grasp the intensity of monetary and fiscal policies to ensure an appropriate and adequate liquidity so as to accelerate the pace of contributing to the funding for local constructions. Efforts need to be made to deepen the supply-side structural reform, optimize the business environment, foster the development of new drivers and solidify the basis for a sustainable and sound development.