China Market Watch: Slowing Trade Growth, and Adjustment of China’s GDP Calculation Method
China Exports and Imports Fall in June Signalling Further Slowing Demand
China’s exports made a further decline last month, partially due to diminished demand overseas, falling by 4.8 percent from the same period last year, after falling by 4.1 percent in May. Imports were also down by 8.4 percent, after falling by 0.4 percent in May, according to the General Administration of Customs. Trade surplus reduced to US$48.1 billion in June from May’s US$50 billion. Demand from abroad is expected to remain weak, especially after the UK’s departure from the European Union. However, things may look more hopeful in the second half because of a weaker yuan and increasing demand from emerging markets.
Didi Chuxing Provides Jobs for Over One Million Former Heavy Industry Workers
Didi Chuxing, the ride-hailing company headquartered in Beijing, has claimed in a self-published report that it has provided over a million jobs to former heavy industry workers across the country. The study revealed that there are now 3.89 million employed from 17 industry heavy provinces across China, with 530,000 of those hailing from provinces that are undergoing a restructure in their coal and steel sectors. The company also claims that it represents over 60 percent of the government’s one year re-employment target for redundant heavy industry workers, and 29.4 percent of its five-year target. This report follows the announcement that 1.8 million steel and coal workers will be laid off in an effort to reduce industrial overcapacity in those sectors. Didi can provide flexible work opportunities and better livelihoods for those made recently redundant from such sectors.
China Adjusts GDP Calculation Adding Worth of US$130 billion
China’s National Bureau of Statistics announced an adjustment to the way it calculates the size of the economy, which has revised up China’s gross domestic product (GDP) for last year by around US$ 130 billion. The adjustment newly included spending on research and development in the formula to make calculations consistent with UN standards. The revision was made with an aim to reflect better growth from innovation. However, the adjustment has only made a 0.04 percent change in estimate figures. The accuracy of China’s official statistics have been subject to questioning, after GDP figures were previously found to be drastically overestimated.
8.6 Percent Output Drop Reported by China’s largest power producer
Huaneng Power, China’s largest power producer, has reported that power production in the first half of the year fell by 8.6 percent. Power generation in the second quarter dropped by 10.06 percent compared to the same period last year. 8.35 percent less electricity was sold by Huaneng in the first half compared to 2015, while the average price of electricity decreased by 12.37 percent. The company put this overall decrease down to heavy rainfall earlier this year, which increased hydroelectricity output by 16.7 percent and led to the reduction of the need for coal fired power plants. Furthermore, an increase of cross regional power transmission has reduced the demand for coal fired power plants located in eastern and southern China, areas where Huaneng’s plants are concentrated.
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