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The nation’s consumer demand is improving but challenges remain

A third straight month of consumer price increases has created optimism but a sluggish manufacturing sector and housing crisis remain major hurdles.

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ARTICLE BY

PUBLISHED

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Less than 1 minute Minutes

UPDATED: 13 May 2024, 8:30 am

China’s consumer prices rose for a third consecutive month in April, indicating a welcome upturn in hitherto sluggish consumer demand, Reuters reports.

Import data for last month also showed improvement, indicating that policy measures to shore up consumer confidence may be taking effect.

Figures from the National Bureau of Statistics show consumer prices edging up 0.3% in April from a year earlier, versus a rise of 0.1% in March. Xu Tianchen, a senior economist at the Economist Intelligence Unit, told Reuters “the consumer inflation data suggests a comeback in demand, especially in services.”

[See more: China’s exports are starting to bounce back]

However, some economists point to China’s muted manufacturing and services sectors, and protracted housing crisis, as an indication that the country still has much economic work to do.

Local governments are also dealing with a combined municipal debt of $13 trillion, leading to delays or postponements for some infrastructure projects, Reuters reports.

China’s central bank said last week that its monetary policy would remain “flexible, precise and effective” to consolidate economic recovery.

However, many analysts say China’s growth target of about 5 percent this year will be difficult to attain without further policy support.

UPDATED: 13 May 2024, 8:30 am

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