中国经济评论：复苏稳步开始

Economics | 15 March 2023 Analyst certifications and other disclosures on last page. This research report has been created by CCB International Securities Ltd. 1 Jan-Feb economic data confirms a gradual recovery is unfolding, and we expect a further recovery. Investment beat expectations thanks to a faster-than-expected turnaround in real estate investment. Other property indicators also exhibited notable improvement. The recovery in retail sales was driven by offline consumption. However, industrial production grew slower than expected, possibly reflecting the disruption from Chinese New Year (CNY). We expect the data to reflect further evidence of a recovery as the economy normalizes. Macro policies to remain supportive. A larger fiscal deficit and higher local government special bond quota is consistent with the supportive policy stance in aid of a sustained recovery. We expect steady investment, solid net exports, and a recovery in consumption, to drive growth. We expect the PBoC to maintain abundant liquidity while refraining from cutting interest rates as the economic outlook improves. 2 月的经济数据证实经济逐步复苏，我们预计复苏将持续。房地产投资下行有所收斂，推动整体投资增速改善。房地产行业的其他指标也有好转。线下消费的复苏推动社会零售销售回暖。但受农历新年的影响，工业生产增速不及预期。随着经济正常化，我们预计数据将进一步改善。 宏观政策预计维持支持取态。2023 年适当扩大的财政赤字和适当提高的地方政府专项债额度，与支持持续复苏的政策立场一致。我们预计稳定的投资和消费复苏，加上净出口坚挺，将支持增长。在经济前景改善的情况下,我们预计央行将维持充裕的流动性，降息可能不大。 Kevin Xie (852) 3911 8241 kevinxie@ccbintl.com Li Cui (852) 3911 8274 cuili@ccbintl.com CCBI SECURITIES | RESEARCH China Economics Update: A gradual recovery is unfolding 中国经济评论: 复苏稳步开始 Economics | 15 March 2023 CCBI SECURITIES 2 A broad economic recovery at the start of 2023 Industrial production (IP) growth rebounded from 1.3% YoY in Dec to 2.4% YoY in Jan-Feb, though the result was below the consensus expectation for 2.6% YoY growth. Sequential IP growth accelerated from -0.1% MoM in Dec to an average of 0.2% MoM over the first two months of 2023, which was nevertheless below the average of 0.6% MoM in 2019. The rebound in industrial production was consistent with rising survey-based manufacturing PMI as China kicked off its economic reopening. However, the CNY in 21-27 Jan 2023 and the Covid outbreak at the start of the year delayed workers’ return to work, disrupting factory operations. By sector, mining output growth slowed slightly from 4.9%YoY in Dec to 4.7% YoY in Jan-Feb, while manufacturing production accelerated from 0.2% YoY in Dec to 2.1% YoY in Jan-Feb (Fig 1). Electricity and utility production grew by 2.4%YoY, slower than Dec’s 7% YoY. Retail sales improved notably following China’s economic reopening. Year-on-year growth rebounded to 3.5% following three consecutive months of contraction in 4Q22, in line with consensus. Sequentially, retail sales growth rebounded to an average of 0.3% MoM, though it remains below the average of 0.7% MoM in 2019 prior to the pandemic. The removal of Covid restrictions led to a 9.2% YoY rise in catering spending in Jan-Feb. Fuel spending ros