On August 14, the website of the National Bureau of Statistics published various data on the operation of the national economy in July. Judging from the data released this time, the performance of this important index in July still continues the previous long-term stable situation. The data shows that from January to July 2019, the national investment in fixed assets (excluding farmers) was 348.892 billion yuan, an increase of 5.7% over the same period of last year, and the growth rate dropped by 0.1 percentage points from January to June. Judging from the ring-to-ring speed, fixed assets investment (excluding farmers) increased by 0.43% in July. At the same time, the performance of industrial added value above July was not as expected. Data show that in July 2019, the value-added of industries above scale increased by 4.8% year-on-year, and the growth rate dropped by 1.5 percentage points compared with June, ending the rebound trend of this index last month, and also setting a new low in the year.
Manufacturing industry investment growth has rebounded in March in succession
From the latest released fixed investment data, it has been considered as an important factor to promote the growth of fixed investment, namely, the growth rate of infrastructure investment declined slightly from January to July. The data shows that infrastructure investment (excluding electricity, heat, gas and water production and supply) in the tertiary industry increased by 3.8% year on year, and the growth rate dropped by 0.3 percentage points from January to June. Among them, investment in water resources management industry decreased by 0.3%, increased by 1.1% in January-June; investment in public facilities management industry increased by 0.1%, decreased by 0.3% in January-June; investment in road transport industry increased by 6.9%, and the growth rate fell by 1.2 percentage points; investment in railway transport industry increased by 12.7%, and the growth rate fell by 1.4 percentage points. In contrast to the trend of infrastructure investment, industrial investment, especially manufacturing investment, went out of a "negative upward" road from January to July. Among the fixed investment of secondary industry, industrial investment increased by 3.8% year-on-year, and the growth rate increased by 0.5 percentage points from January to June. Among them, manufacturing investment increased by 3.3%, and the growth rate increased by 0.3 percentage points. Reporters noted that from the data point of view, manufacturing investment data has been rising for three consecutive months. Why can manufacturing investment continue to strengthen? Lu Zhengwei, chief economist of Societe Generale Bank, commented that in the manufacturing sector, credit spreads and production and operation expectations have a certain lead in investment. Influenced by the decline of credit spreads of private enterprises and the improvement of enterprises'production and operation expectations, manufacturing investment continued to rise slightly in July, rising to 3.3%.
However, the political commissar of Lu also said that the sustainability of the current recovery in manufacturing investment remains to be seen. On the one hand, due to the uncertainties of the trade situation, enterprises'production and operation activities are expected to fall back again in the near future. On the other hand, under the influence of financial institutions' risk events in May, the credit spreads of private enterprises are rising again, and private enterprises'financing is still facing challenges.
In July, the decline of automobile output narrowed significantly and in terms of industrial added value above scale, although PMI data, an important leading indicator reflecting industrial operation, showed a rebound (49.7% in July, up 0.3 percentage points over the previous month), the data released showed that industrial added value in July was increased by 0.3 percentage points. Growth rate is not as good as market expectations. Why is there a contradiction between PMI and industrial added value? According to Li Qilin, chief economist of Lianhe Securities, the fluctuation of industrial value-added data may be greater than that of the actual production of industrial enterprises. Considering June and July as a whole, the average annual growth rate is 0.43%, slightly higher than the 0.40% in May. This means that industrial production in July may not be as depressed as the data reflect, and the growth rate of industrial value added is expected to rebound in August. Yang Chang, senior economist and head of policy group of China-Thailand Securities Research Institute, also believes that although this month's data show that the growth rate of industrial added value has declined, it is noteworthy that the decline in automobile production has narrowed in the same period.
He said that in terms of industrial data this month, steel production in key products increased 9.6% year-on-year, down 3 percentage points from June; cement production increased 7.5% year-on-year, up 1.5 percentage points from the previous month; and it is worth noting that automobile production decreased 11.5% year-on-year, down 3.7 percentage points from last month. The weakening of industrial data inevitably leads some market participants to believe that strong stimulus policies are on the way. However, at a news conference held by the State New Office on the 14th, Liu Aihua, spokesman of the National Bureau of Statistics, responded clearly: "At present, we have not taken the measure of"flood irrigation".
She further said that at present, we are paying more attention to stimulating market vitality and enhancing the internal power of the economy, promoting the reform of "release and control clothing", taking supply-side structural reform as the main line, implementing innovation-driven development strategy, optimizing business environment, reducing taxes and fees on a large scale, in order to cope with the transformation and development in the process of high-quality development. Various problems arise during the period of tackling key problems in optimizing the economic structure.
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