By Xin Yuan Jiemian News Data released by the National Bureau of Statistics on Friday showed that from January to April, China’s fixed asset investment fell 10.3% year on year, a decline that was 5.8 percentage points narrower than that of the previous three months. In April, total retail sales of consumer goods dropped 7.5% year on year, 8.3 percentage points narrower than that of March. China’s industrial value-added rose 3.9%, an increase of 5 percentage points over the previous month. The median forecast of seven institutions polled by Jiemian News showed that from January to April, fixed assets investment shrank 10% year on year; In April, the total retail sales of consumer goods fell 6% and the industrial value-added edged up 1.8%. For China’s overall economic performance in April, Wu Chaoming, chief economist with Chasing Securities, told Jiemian News that both manufacturing and non-manufacturing indicators have shown marginal improvement. High-frequency data such as power generation, passenger traffic and operating rate also suggests that the economy is warming up. In terms of the driving factors behind the economic recovery, he pointed out that with the domestic epidemic prevention and control situation improving, resumption of work and production have managed to be comprehensively and orderly carried out. In addition, monetary and fiscal policies are paying off. In April, financial data such as credit and social financing rose more than expected, reflecting the further increase of credit support in the financial system to the real economy, especially the obvious surge in medium and long-term corporate loans. These suggest funds are continuously flowing into the real economy. Wu said that while the improvement trend of the domestic economy is obvious, the strength of recovery will depend on the spread of the pandemic globally and the effect of domestic countercyclical policy adjustment. A report by China Merchants Securities suggested that overall, China’s economy has exhibited a weak recovery pattern, with GDP growth poised to rebound in the second quarter. But it is difficult to return to the 5% -6% growth momentum year on year. In terms of investment, from January to April, infrastructure investment plunged 11.8% year on year, with the decline narrowing 7.9 percentage points from that in the first quarter. Analysts believed that with the gradual materialization of followup projects and policy support, infrastructure investment will continue to bounce back. Li Chao, chief economist with Zheshang Securities, told Jiemian News that traditional infrastructure projects remain the key driving force in most provinces’ investment plans for major projects in 2020. Currently, major projects across the country have kicked off, and the intensity of work has returned to the normal level of previous years. It is expected that by the end of the second quarter, growth of the cumulative infrastructure investment is likely to turn positive year on year. In April, sales of excavators, a “barometer” of infrastructure investment, boomed. Data recently released by China Construction Machinery Association revealed that a total of 45,426 units of excavators were sold in April by the 25 excavator manufacturers surveyed by the association, recording a record high of 59.9% year-on-year surge.  In addition, since mid- to late April, the national steel price index has registered accelerated recovery, with steel product prices such as those of rebars and hot-rolled coils stabilizing and rebounding, all of which indicate that investment demand has somewhat improved. Analysis from Minsheng Securities showed two main factors bolstering infrastructure investment in the future: First, special bonds. The Ministry of Finance has recently started issuing another 1 trillion yuan of special bonds in advance, which will be completely issued before the end of May and are expected to stimulate the economy; Second, the real estate investment trusts (REITs) in the field of infrastructure. At the end of April, the China Securities Regulatory Commission solicited opinions on the issuance of public traded REITs in the infrastructure realm. This is set to change the current reliance of local government debt issuance in infrastructure financing, attract more private capital, and further drive infrastructure construction. In terms of real estate investment, from January to April, real estate development investment dipped 3.3% year on year, a decline of 4.4 percentage points narrower than that in the first quarter. From January to April, the total area sold in commercial housing decreased 19.3% year on year, a decline that was 7 percentage points milder than that of January to March. Yan Yuejin, research director of the Shanghai Yiju Real Estate Research Institute, told Jiemian News that judging from the current nationwide support for real estate enterprises, the trend of real estate development investment is clear: The decline will be further narrowed. In January-April, investment in the manufacturing industry fell by 18.8% year on year, but the decline narrowed 6.4 percentage points from the first quarter. Liu Xuezhi, a senior researcher at the Bank of Communications Financial Research Center, told Jiemian that the global spread of the pandemic has weakened demand, which has had a greater impact on export-oriented manufacturers. The overall investment in manufacturing is still expected to be poor and negative growth will remain in the short term. TF Securities also said in a research note that investment is procyclical in the manufacturing industry. Currently China’s economy is in a downward cycle, and the manufacturing industry will remain weak in the second quarter. In addition, as for the overseas epidemic situation, the second quarter may be the worst period for the overseas economy, which will have an impact on the export demand in the manufacturing industry. With the accelerated resumption of work and production, the industrial economy has also been significantly restored. The high-frequency data monitored by the Bank of Communications Financial Research Center showed that since April, the average daily coal consumption of the six major power generation groups has remained at around 550,000 tons per day, with a year-on-year decline narrowing from 25% in March to 10%. The daily production of crude steel and fine iron powder at the country’s major enterprises is slightly higher than that of the same period of last year, and the operating rate of blast furnaces has gradually recovered to the level of about 68%, similar to the third quarter of last year. “For a certain period in the future, thanks to the supporting policy to stabilize domestic growth and expand demand, the industrial value added is expected to maintain a slight increase. However, due to the pressure of weakening demand, especially the risk of weakening external demand, the rebound of industrial value added may be limited,” said Liu. It is worth noting that the surveyed unemployment rate in urban areas in April was 6.0%, an increase of 0.1 percentage point from the previous month. It marked that the unemployment rate rebounded again after a decline in March. Due to the impact of the sluggish employment, among key economic data, only retail sales didn’t post positive growth in April. Liu said that under the impact of the pandemic, slowdown in economic growth becomes a global phenomenon. The significance of China’s economic growth target this year has declined, and the greatest pressure is on employment. The surveyed unemployment rate in urban areas in April exceeded last year’s target by 0.5 percentage points. Stabilizing employment is the top priority this year. He pointed out that the efforts to stabilize employment should be made in three aspects. First, the country will need to guarantee the employment in key industries and key populations, with a focus on helping stabilize employment of college graduates and migrant workers in nearby regions, while giving priority to helping people in poor areas ensure jobs when resuming work and production. Secondly, the country shall help small and medium-sized enterprises to overcome difficulties, accelerate the implementation of various fiscal preferential policies, promote tax and fee reduction, improve the survival and development capabilities of SMEs, and help enterprises to maintain the capacity to keep the headcount. Thirdly, the country shall actively expand effective investment through fiscal policies, strengthen traditional infrastructure and new infrastructure investment, and drive the growth of new jobs. However, with the eased pandemic situation and growing effect of stimulus on the consumption side, residents’ consumption demand has increased. Statistics from the National Bureau of Statistics showed that in April, revenue in the catering industry was 230.7 billion yuan, a year-on-year decrease of 31.1%, but it narrowed 15.7 percentage points from the previous month. Consumption in the automotive sector was 308.3 billion yuan, unchanged from the same period last year, and the growth rate was 18.1 percentage points higher than that in March. In response to the impact of the epidemic on the automobile market, most provinces across the country have issued stimulus policies for automobile consumption. The main measures include the increase of small car quotas, subsidies for purchase of new vehicles or new energy vehicles, trade-in subsidies, and different forms of consumer coupons or direct discounts. Thanks to the gradual implementation of various subsidies, domestic passenger car sales reached 1.536 million units in April, an increase of 45.6% month on month and a year-on-year decrease of 2.6%, narrowing significantly by 45.8 percentage points from March. In addition, since the start of May, various regions across the country have continued to make all efforts to stimulate consumption. Beijing’s Xicheng District, Shandong’s Yantai and other places have introduced various forms of consumer coupons. The Double Five Shopping Festival in Shanghai and the “20 Measures to Promote Consumption” in Guangzhou have helped both online and offline consumption rebound.