China continues recovery in May with boost from services sector

The Chinese economy continued to recover in May with the services industry showing rapid growth, although some experts noted that more support may be needed amid external headwinds and uneven recovery across sectors.

China's total retail sales of consumer goods rose 12.7 percent yearly to 3.78 trillion yuan ($526.91 billion) in May, data from the National Bureau of Statistics (NBS) showed on Thursday.

Among those numbers, the revenue of the retail sales of goods jumped 10.5 percent from last year, while the revenue in the catering sector surged 35.1 percent.

The added value of China's large industrial enterprises increased by 3.5 percent on a yearly basis in May, NBS data showed.

Also in May, China's unemployment rate among people aged 25 to 59 stood at 4.1 percent, narrowing down 0.1 percentage point from the previous month, showing a fall which has lasted for three consecutive months.

This indicates that the foundation of the jobs market was generally stable and improving, said Fu Linghui, an NBS spokesperson.

The youth unemployment rate hovered at a high level with the surveyed jobless rate for people aged 16 and 24 coming in at 20.8 percent, according to the NBS.

At present, more than 6 million young people are out of a job, but as the economy continues to improve, it will provide good support for maintaining overall stability in employment, said Fu.

China has set an economic growth target of around 5 percent for 2023.

Noting a wide variation in growth momentum across different parts of the economy, Bruce Pang, chief economist and director of research at JLL Greater China, said China may need to be more patient in shoring up economic recovery which has slowed.

He said the country needs to regain a higher potential growth rate with more balanced growth drivers and stronger internal "dynamism."

China's central bank on Thursday added liquidity to the banking system through the medium-term lending facility and reverse repurchase agreements following an interest rate cut for seven-day reverse repos to 1.9 percent from 2 percent on Tuesday. Pang said that more cuts to interest rates and the reserve requirement ratio are necessary this year.

The NBS cautioned in a notice along with the data release that the international environment is now complex and grim, and the foundation for China's economic recovery is far from stable.

Going forward, China should focus on restoring and expanding demand, fully utilize policies, stimulate business vitality and stabilize market confidence, it added.

(CGTN)