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XIIAN (CHINA): Yizhuan Automobile Co.’s garbage truck sales rebounded after China ended anti-virus controls in December, but its growth is slowing as managers struggle to rebuild business lost during the pandemic.
The Chinese economy rebounded at the start of 2023, but after a good first quarter, factory output and consumer spending weakened. An official survey in April found that 1 in 5 young urban workers are out of work.
Yizhuan’s sales only rose by single-digit percentages from last year’s low, according to deputy general manager Yu Xiongli. The company with 300 employees is located in Hubei province, where the first cases of coronavirus were detected in late 2019.
“She’s still in recovery,” Yu said. “Growth is too slow.”
China’s economic growth accelerated to 4.5% year-on-year in the three months to March from 2.9% in the previous quarter, but forecasters say the peak of that recovery may already be past.
Growth will need to pick up further to reach the ruling Communist Party’s target of “around 5%” for the year.
“At the moment, continued momentum doesn’t look very promising,” he said. Economist at UBS Chang Ning.
Zhang said the economy needs a “recovery in domestic demand” with government support to boost confidence for businesses and consumers.
An end to restrictions that isolated cities for weeks at a time and blocked most international travel has raised hopes of a consumer boom. But retail sales are weak. Shoppers feel uneasy about the economic outlook and potential job losses and are reluctant to commit to large purchases.
Retail sales in April were up 18.4% from a lackluster year-ago level, but that was barely half the 35% growth private sector forecasts called for. Factory production fell 0.5% compared to March and investment growth slowed.
“I have concerns about spending money,” said Xue Liang, who works in IT in Beijing. COVID-19 and changes in the international situation have made us worry a lot.”
Manufacturing contracted faster in May, according to a survey by the national statistics agency and an industry group. New orders and export orders were rejected.
Exports in May fell 7.5% from a year ago after global consumer demand slumped due to interest rate hikes by the Federal Reserve and central banks in Europe and Asia to cool inflation. Exports to the United States fell by 18.2%.
This is the challenge for automakers and other manufacturers trying to offset weak demand at home by selling more abroad.
Tenglong Automobile Co., Ltd. sent Ltd., which makes electric buses in the southwestern city of Xiangyang, sent sales representatives to Russia, South Korea and Southeast Asia once travel controls ended in a bid to revive orders after a three-year gap.
“Last year, our foreign customers basically didn’t come,” said Zhou Shengming, deputy general manager of Tenglong. But this year, we already have several batches. In May, we had three.”
Yizhuan in Shiyan, which also sells sanitation and stevedoring trucks to city governments and construction companies, says it exports about $20 million worth of vehicles a year to Russia and Southeast Asia.
Li Yichun, who runs a bodyguard company in Beijing, said his clients are less willing to spend.
“You can see from my work that the economy is not recovering very well,” he told me. “A lot of clients who are bosses don’t intend to spend on staffing as much as they once did.”
The Chinese economy rebounded at the start of 2023, but after a good first quarter, factory output and consumer spending weakened. An official survey in April found that 1 in 5 young urban workers are out of work.
Yizhuan’s sales only rose by single-digit percentages from last year’s low, according to deputy general manager Yu Xiongli. The company with 300 employees is located in Hubei province, where the first cases of coronavirus were detected in late 2019.
“She’s still in recovery,” Yu said. “Growth is too slow.”
China’s economic growth accelerated to 4.5% year-on-year in the three months to March from 2.9% in the previous quarter, but forecasters say the peak of that recovery may already be past.
Growth will need to pick up further to reach the ruling Communist Party’s target of “around 5%” for the year.
“At the moment, continued momentum doesn’t look very promising,” he said. Economist at UBS Chang Ning.
Zhang said the economy needs a “recovery in domestic demand” with government support to boost confidence for businesses and consumers.
An end to restrictions that isolated cities for weeks at a time and blocked most international travel has raised hopes of a consumer boom. But retail sales are weak. Shoppers feel uneasy about the economic outlook and potential job losses and are reluctant to commit to large purchases.
Retail sales in April were up 18.4% from a lackluster year-ago level, but that was barely half the 35% growth private sector forecasts called for. Factory production fell 0.5% compared to March and investment growth slowed.
“I have concerns about spending money,” said Xue Liang, who works in IT in Beijing. COVID-19 and changes in the international situation have made us worry a lot.”
Manufacturing contracted faster in May, according to a survey by the national statistics agency and an industry group. New orders and export orders were rejected.
Exports in May fell 7.5% from a year ago after global consumer demand slumped due to interest rate hikes by the Federal Reserve and central banks in Europe and Asia to cool inflation. Exports to the United States fell by 18.2%.
This is the challenge for automakers and other manufacturers trying to offset weak demand at home by selling more abroad.
Tenglong Automobile Co., Ltd. sent Ltd., which makes electric buses in the southwestern city of Xiangyang, sent sales representatives to Russia, South Korea and Southeast Asia once travel controls ended in a bid to revive orders after a three-year gap.
“Last year, our foreign customers basically didn’t come,” said Zhou Shengming, deputy general manager of Tenglong. But this year, we already have several batches. In May, we had three.”
Yizhuan in Shiyan, which also sells sanitation and stevedoring trucks to city governments and construction companies, says it exports about $20 million worth of vehicles a year to Russia and Southeast Asia.
Li Yichun, who runs a bodyguard company in Beijing, said his clients are less willing to spend.
“You can see from my work that the economy is not recovering very well,” he told me. “A lot of clients who are bosses don’t intend to spend on staffing as much as they once did.”
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