May 14, 2013
Translated by Liu Jingyue

In the first quarter of 2013 China experienced a widely publicized slowdown in the pace of economic growth. In April, consumption, investment and exports increased only slightly from March, and overall the economic indicators released yesterday were lower than most economists expected.

Consumption

According to China's National Bureau of Statistics (NBS), consumer spending in April increased 12.8 percent year-on-year. While this increase appears significant, when compared to the same figure from March, consumer spending in April increased by only 0.2 percent.

According to Lian Ping (连平), chief economist at the Bank of Communications, while the recovery of the automobile and property markets should boost consumption, overall growth in consumption is expected to remain weak due to official spending cuts and meager increases in income.

Qu Hongbin (曲宏斌), chief economist of HSBC's Greater China Region, said the slowdown is partly related to China's recent nation-wide campaign against corruption and wasteful spending. The campaigns effect can be seen in the declining sales revenue of large restaurants, which in April decreased 2.8 percent compared with the same period last year.

Investment

Data released by the NBS revealed that the pace of investment growth slowed over the January to April period. The pace of fixed-asset investment growth dropped from 20.6 percent in March to 19.8 percent in April.

Despite the slowdown in overall investment growth, investment in property remains strong. From January to April, nominal investment in the property market increased 21.1 percent, a 0.9 percent increase compared to the growth during the first three months. The increase in property investment has eased the impact of a slowing investment in infrastructure and manufacturing.  

Exports

In April China's export grew by an unexpectedly high 14.7 percent, fuelled mainly by a significant increase in exports to Hong Kong. Analysts suspect that the increase was caused not by an actual significant increase in exports, but rather by fake transactions used to mask capital flows into China.

Target export and import growth for 2013 were lowered from 10 percent to 8 percent. Despite the revision, many still question whether such a target can be met. Lian Ping said that due to rising labor costs, limited availability of resources and appreciation of the yuan, it is unlikely export growth will be high this year.

Links and Sources
Shanghai Securities News:4月经济数据整体逊于预期
National Bureau of Statistics: 2013年4月份消费品市场情况
National Bureau of Statistics: 2013年1-4月份全国民间固定资产投资主要情况