China’s economic recovery continues to be uneven as the country’s April economic data fell short of expectations. According to a Reuters poll, economists had expected industrial production to rise by 10.9% in April and retail sales to rise by 21%. However, the actual figures show a rise of only 5.6% and 18.4% respectively. Fixed asset investment also missed expectations, increasing by 4.7% compared to the expected 5.5%. Despite the positive year-on-year numbers, analysts suggest that the figures may not be enough to meet investor expectations, and pent-up demand appears to be fading.
The youth unemployment rate in China hit a record high in April, raising concerns about where the recovery of confidence and consumption will come from. Goldman Sachs economist Hui Xiang suggests that interest rate changes are unlikely to improve market confidence and expects more action from the government to restore investor sentiment. The Shenzhen component of Chinese stocks has lost most of its gains this year, falling 4.67% in the quarter to date and down 9.5% from its peak in early February.