China's economy is slowing down due to the energy crisis which has a wide impact on the economy. However, China's GDP in the last quarter of 2021 still outperformed economists' projections.
On Monday (17/January), China's National Bureau of Statistics released data on GDP for the fourth quarter of 2021, which grew by 4.0 percent on an annual basis (Year-over-Year). This time, growth slowed from 4.9 percent in the third quarter, but still better than the forecast for an increase of only 3.6 percent.
Despite slowing growth throughout the October-December period, China's GDP is actually still up 8.1 percent throughout 2021. This growth is in line with the "above 6 percent" growth target for 2021 set by the congress in March last year.
China's economy has been losing momentum since the second half of 2021 due to slowing domestic and international demand. In addition, natural disasters that hit the coal distribution area caused the country to suffer from an energy crisis in the period September-October 2021. As a result, manufacturing activity and the economy in general were adversely affected.
China Retail Sales Slump
Separately, the release of retail sales (Retail Sales) this morning only posted a 1.7 percent YoY increase in December. This figure has fallen quite far from the 3.9 percent gain in the previous month. Most consumers have spent their money during the annual shopping festival in November, resulting in a significant decline in December.
Meanwhile, China's Industrial Production rose from 3.8 percent to 4.3 percent during December. Data on fixed asset investment (Fixed Asset investment) also rose 4.9 percent year-to-date. China's investment growth has tended to be stable in recent months, inseparable from government intervention which has poured a lot of stimulus for infrastructure.
Broadly speaking, the release of China's fundamental data this morning still reflects economic growth even though it is overshadowed by various obstacles. Analysts expect China's economy to rebound in the first quarter of 2022, supported by bright outlooks for overseas demand and a resolved energy crisis.
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