GDP grew by 4.5 per cent and retail by only 1.1 per cent: Why is the heat of exports not going into Chinese households?

A cargo ship leaving the docks would add a further amount to the export figures; One family delayed changing their homes and bought less than one dress, but it was difficult to enter those inspiring economic titles. On 19 October, China announced a 4.5 per cent increase in GDP over the same period in the third quarter, which is higher than 4.3 per cent in the second quarter; The value added of industry in September increased by 5.5 per cent over the same period. A second set of figures, which is also included, is the increase of only 1.1 per cent in total retail sales of social consumer goods, which continues to be under pressure on real estate and fixed-asset investments.

Statistically, this was a rebound that exceeded market expectations. Reuters surveys had previously projected a 4.4 per cent increase in the three quarters, while the national statistical office had actually published a slightly better 4.5 per cent, or 1.2 per cent, of the ring. In the same economy, however, the increase in plant output did not coincide with the expansion of residential purchases. Growth is reflected first and foremost in the export manufacturing chain, and household expenditure is more cautious.

Export allows for the processing, production and recruitment of some of the coastal plants, which is a real economic activity that cannot be ignored. However, export orders do not automatically translate into a stable real income for workers; Enterprises may also face a contraction of profitability, increased automated investment and cross-border trade friction. More importantly, shrinking housing assets and insecurity about employment prospects can prompt people to keep money in savings accounts rather than in consumer markets. The macro-data reported do not in itself support the financial position of each household, but rather indicate that domestic demand has not recovered.

Why policy travels slowly at home

Beijing continues to view high-end manufacturing, technological upgrading and industrial chain competitiveness as engines of economic growth. Policies that subsidize equipment and support enterprise investment can indeed push productivity up; But the population dared to spend money, depending on the individual burden of health care, education, old age and unemployment. For those who do not know when the next wage will arrive, the low interest rate is not necessarily sufficient to encourage consumption. Stimulating supplies can create more commodities, but they cannot relieve families of their fears about the future.

The Associated Press reports that China’s trade surplus for the first nine months of the year was about $938 billion, and that export dynamics may also widen the conflict with trading partners. Weak domestic demand means that more and more products need to be absorbed by international markets; Increased barriers to trade abroad, in turn, can impact on jobs that depend on exports for their livelihood. The growth model thus has a self-repressive side.

4.5 per cent is not an absence of growth, and 1.1 per cent is not proof of a recession for everyone. Together, the two show that China’s biggest economic suspense is not just how much it can produce, but when ordinary households will be able to gain enough security from growth and be willing to spend the money they earn.