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The added-value industrial output grew by 6.1% in May 2015, up from 5.9% in April.
Fixed assets investment grew by 11.4% in Jan-May 2015.
Retail sales increased by 10.1% in May 2015.
Inflation edged down from 1.5% in April 2015 to 1.2% in May.
In May 2015, exports (in terms of US$) declined by 2.5%, while imports (in terms of US$) decreased by 17.6%, resulting in a trade surplus of US$59.5 billion.
The Manufacturing Purchasing Managers’ Index edged up to 50.2 in May 2015 from 50.1 in April.
Current Economic Development
The Chinese economy grew by 9.3% in 2011 and slowed to 7.7% in both 2012 and 2013. In the four quarters of 2014, GDP grew by 7.4%, 7.5%,7.3% and 7.3% respectively, resulting in an average growth of 7.4% in 2014. In the first quarter of 2015, GDP grew by 7%.
The PBOC reduced the reserve requirement ratio by 0.5 percentage points on 5 February 2015. The base lending rates were cut by 0.25 percentage points on 8 June 2012 and by another 0.31 percentage points on 6 July 2012. On 22 November 2014, the base lending rates were cut by 0.4 percentage points and by another 0.25 percentage on 1 March 2015. On 11 May 2015, the base lending rate was cut by 0.25 percentage points again.
Fixed assets investment is one of the major driving forces of the economy. After growing by 23.8% in 2011, fixed assets investment slowed to 20.6% and 19.6% in 2012 and 2013 respectively. In 2014, fixed assets investment grew by 15.7%, down from 17.3% in the first half of 2014. In the first five months of 2015, it grew by 11.4%, down from 13.5% in the first three months.
In 2013, added-value of industrial output (by large enterprises with annual sales exceeding RMB20 million) growth slowed to 9.7% and further down to 8.3% in 2014. In the first five months of 2015, added-value of industrial output grew by 6.2% with foreign-invested enterprises grew by 3.7%.
In 2014, consumer price index (CPI) increased by 2% with food prices increased by 3.1% and non-food prices up by 1.4%. In the first five months of 2015, CPI went up by 1.3% with food prices up by 2% and non-food prices up by 0.9%.
In 2013, growth of retail sales of consumer goods stood at 13.1% (real growth at 11.5%). In 2014, retail sales grew by 12% (real growth at 10.9%). In the first five months of 2015, retail sales grew by 10.4% with sales of household electrical appliances growing at 10.8%, garments & footwear at 11%, furniture at 16.1%, automobiles at 4.6% and jewellery at 6%.
China’s Manufacturing Purchasing Managers’ Index (PMI) (compiled by China Federation of Logistics & Purchasing and China Logistics Information Centre) edged up to 50.2 in May 2015 from 50.1 in April 2015.
Money supply - total loan grew at 13.1% in May 2015 compared to 13.4% in April 2015 and RMB loans grew at 14% in May 2015 compared to 14.1% in April 2015.
Foreign Trade and Investment
In 2014, China's total external trade reached US$4,303 billion, ranked the first in the world. In 2014, exports and imports grew by 6.1% and 0.4% respectively, resulting in a trade surplus of US$382.4 billion.
The share of export-processing trade is declining in recent years. Export-processing trade accounted for 51% of China's total exports in 2007, but dropped to 38% in 2014. In 2014, exports of processing trade grew by 2.7% while imports grew by 5.7%.
In 2014, exports of machinery, electrical and electronic products grew by 3.7%, exports of garment grew by 5.2% and footwear increased by 10.8%. In the first five months of 2015, exports of electrical and electronic products grew by 2.6% (In US$ terms), exports of garment dropped by 5.1% and footwear increased by 0.7%.
In 2014, China's top ten export markets were US, Hong Kong, Japan, South Korea, Germany, Netherlands, Vietnam, UK, India and Russia. China's total exports with these ten economies together accounted for about 59% of China's total exports in 2014.
In 2014, exports of foreign-invested enterprises (FIEs) grew by 3%, accounting for 45.9% of China’s total exports, and imports increased by 3.9%, representing 46.4% of China’s total imports.
By the end of 2014, China approved a cumulative of 809,829 foreign investment projects, with actual utilized overseas FDI amounting to US$1,513 billion. The leading sources of investment included Hong Kong, Taiwan, Japan, Singapore, the US, South Korea, UK and Germany.
In 2014, FDI made by Chinese enterprises in non-financial sectors of overseas markets stood at US$102.9 billion (+14.1%). Business services (mainly investment holdings), wholesale and retail, mining and manufacturing are the leading sectors (non-financial sectors) of China's outward FDI.
Economic Relations with Hong Kong
The Chinese mainland and Hong Kong signed the Closer Economic Partnership Arrangement (CEPA) on 29 June 2003 and supplemented with further liberalisation measures in subsequent years. At present, all products of Hong Kong origin can be imported into the mainland tariff free under CEPA. For products which have no agreed CEPA rules of origin at present, Hong Kong will initiate discussions with the mainland twice a year upon requests by local manufacturers. Hong Kong service suppliers enjoy preferential treatment in entering into the mainland market in various service areas. There are also agreements or arrangements on mutual recognition of professional qualification. On 18 December 2014, the Agreement on Achieving Basic Liberalization of Trade in Services in Guangdong was signed and to be implemented on 1 March 2015. The Agreement adopts a hybrid approach of positive and negative lists to set out the liberalisation measures in the Guangdong province applying to Hong Kong. The breadth and depth of liberalization surpass the previous measures for early and pilot implementation in Guangdong.
Hong Kong is an important entrepot of the Chinese Mainland. According to Hong Kong statistics, in 2014, 60% of Hong Kong’s re-exports were of China origin and 54% were destined for the Chinese mainland.
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