April Data Says China Increasingly Reliant on Real Estate

A few days ago, I warned: No Stimulus is Coming! Second-Tier Land Boom Triggers Govt Warning. One component of the land boom has been capital flowing through trust products into real estate development companies. The latest NBS report on the real estate sector confirms a tsunami of capital pouring into real estate:

There's no sign of the capital in land purchases nationally, those are off by 33 percent year-on-year. Completed projects are down, sales are flat. Growth is concentrated in new construction starts and projects under construction. This is the relevant section from the NBS report, translated through Sogou.

Industrial production slumped back to trend.

There are some bright spots in the industrial production report, but far more dark clouds. Auto industry production fell 1.1 percent yoy in April and 0.3 percent yoy through April indicating an accelerating slowdown. Autos down 15.8 percent in April and 11.8 percent YTD. The decline in industrial robots slowed to 7.3 percent in April, 10.2 percent YTD. EV car production rose 17.1 percent in April, much slower than the 41.1 percent YTD growth.

Fixed asset investment was steady, but real estate investment is subcomponent. State directed investment grew 7.8 percent YTD, private investment 5.5 percent. Growth was concentrated in healthcare, railway and education.

The rebalancing to a consumption economy isn't happening. Retail sales plummeted.

The slowdown was evident in several areas including smartphones (communications) and autos, but more concerning is the dip in petroleum sales:

Update: The retail slump was blamed on fewer holidays. Caixin: Lackluster Economic Data Suggest Weak Recovery

The slower growth in retail sales was mainly caused by the fact that this April had fewer national holidays and weekends than last year, the NBS said in a statement (link in Chinese). Excluding this factor, retail sales would have grown 8.7% year-on-year last month, unchanged from the increase in March.