New York Times:

The services number was not bad last month, but retail sales looked much weaker. If you take out groceries, they were quite weak. Are consumers in China becoming more cautious about making large value discretionary purchases? Thank you.

Liu Aihua:

Thanks for your question and for looking at the data carefully. Under current background of implementing regular epidemic prevention and control measures, we must view the economic situation under a bigger picture. The outbreak of COVID-19 has affected both production and consumption. At present, the recovery of production is slightly faster than that of consumption, which is related to the characteristics of the impact caused by the outbreak. Although the epidemic has now moved from a state of emergency to regular prevention and control, consumption and services based on gatherings and direct contact still need time to recover. The changes in the data also show that there is a gap between the recovery in the retail sales and that in the services sector. In April, the total retail sales of consumer goods declined 7.5% year on year, while the Index of Services Production dropped by 4.5% year on year. What's the difference between these two bits of data? The service industry is a multi-faceted industry, which includes not only direct contact and gatherings, but also services based on information technology. For example, some industries such as online education and telecommuting have benefited during the response to the outbreak of the epidemic. I think this can partly explain why the recovery in services sector is better than that in retail sales. That is the difference between the two indicators. Thank you.

CNR:

We noticed that in April, the total retail sales of consumer goods declined 7.5% year on year, down 8.3 percentage points from March, indicating that market sales are picking up. May I ask whether this recovery is sustainable? Given the continuous spread of the epidemic abroad, how will you further expand domestic demand in the next step? Thank you.

Liu Aihua:

Thanks for your question. In April, the total retail sales of consumer goods declined 7.5% year on year, a narrowing of 8.3 percentage points compared with March. Structurally speaking, the sale of goods for basic living grew fastest: grain, oil, food and beverages maintained double-digit growth. Second, sales of upgraded consumer goods maintained the momentum of accelerated growth. Meanwhile, sales of telecommunication equipment maintained double-digit growth, while the growth of cultural and office appliances also accelerated. Third, retail sales of some important items are actually recovering. For example, sales of automobiles were steady in April. The recovery of these goods with high proportion has helped the overall recovery of retail sales, and slowed down the decline.

For the next step, the momentum of current consumption upgrading will continue. The retail changes from month to month this year shows that the general trend has not changed. The retail sales of goods for basic living maintained steady growth, and that of upgraded consumer goods continued to grow rapidly. The industries and product sales once affected by the outbreak have shown momentum in their recovery under the current situation of epidemic prevention and control. Therefore, we think that the recovery of consumption still faces some challenges, and pressure still exists. However, in the short term, as the work and production gradually resume and the order of production and life gradually return to normal, the consumption environment will gradually improve. In the long run, there are conditions for the recovery of the consumption to be sustained. Thank you.