MNI DATA IMPACT: China Q1 GDP Falls 6.8%, First Drop On Record

     BEIJING (MNI) - China's GDP slipped -6.8% y/y in Q1, the first drop on

record, as the coronavirus pandemic disrupted the world's second-largest

economy, according to data released by the National Bureau of Statistics (NBS)

on Friday.

     The fall was in line with the -6.0% decline projected by economists as the

economy showed promising signs of recovery in March.

     "There was a marked improvement in March's major indicators, with declines

sharply moderated," said NBS spokesman Mao Shengyong.

     Industrial activity and investment in March largely recovered from the

historic lows seen in January and February, though there was a limited pick up

in consumption as retailers resumed operations at a slower pace than

industrials.

     Here are some of the data highlights:

     - Industrial production slipped -1.1%y/y in March, largely recovering from

the -13.5% y/y decline of Jan-Feb and outshining the projected -7.0% fall.

     - Retail sales fell -15.8% y/y in March, picking up moderately from the

-20.5% slump in the first two months but underperforming the -10.0% forecast.

This was the second drop on record.

     - Fixed-asset Investment tumbled -16.1% y/y in Q1, improving from the

-24.5% plunge in Jan-Feb but weaker than the -15.0% projection. This is the

second lowest level in history and was partly due to the fall in manufacturing

investment, which fell -25.2% y/y after the 31.5% plunge in the first two

months.

     - Infrastructure investment growth recovered to -19.7% y/y in Q1 from the

-30.3% slump in January and February. Meanwhile, property investment growth

rebounded to -7.7% y/y from the previous -16.3%.

     - Registered urban unemployment improved to 5.9% in March from February's

6.2%. The rate in 31 major cities remained flat at 5.7% from the previous month.

Mao noted that there have been no large-scale layoffs. 

     "There was a marked improvement in March's major indicators, with declines

sharply moderated," said NBS spokesman Mao Shengyong.

     Industrial activity and investment in March largely recovered from the

historical lows seen in January and February, though consumption saw limited

pick up as retailers resumed operations much slower than industrials.

     Here are some of the data highlights:

     - Industrial production slipped 1.1%y/y in March, largely recovering from

the 13.5% y/y decline in Jan-Feb, outshining the projected -7.0%. 

     - Retail sales fell 15.8% y/y in March, picking up moderately from the

20.5% slump in the first two months, underperforming the -10.0% forecast. This

was the second drop on record.

     - Fixed-asset Investment tumbled 16.1% y/y in Q1, accelerating from the

24.5% plunge in Jan-Feb, but weaker than the -15.0% projection. This second

lowest level in history was partly due to the fall in manufacturing investment,

which fell 25.2% y/y compared to the 31.5% plunge in the first two months.

     - Infrastructure investment growth largely recovered to -19.7% y/y in Q1

from the 30.3% slump in January and February. Meanwhile, property investment

growth rebounded to -7.7% y/y from the previous -16.3%.

     - Registered urban unemployment slowed down to 5.9% in March from

February's 6.2%. The rate in 31 major cities remained flat at 5.7% from the

previous month. Mao noted that there have been no large-scale layoffs.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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