Market

by+Flora+Zhao

Market performance and features

The domestic consumer market remained a stable and rapid growth since the beginning of the year. In JanuaryMay， the retail sales of consumer goods reached RMB 11.7 trillion， up 10.4% year on year. Among that， the retail sales of consumer goods in May increased slightly， up 10.1% year on year， 0.1 percentage points higher than that of the previous month， and up 10.2% with the price factor excluded， 0.3 percentage points higher than the previous month. The main features are as follows：

New business types maintained a rapid growth. In January-May， the retail sales of online products increased 38.5%， accounting for 9.5% of the total retail sales of consumer goods， with the proportion up continuously， and 0.4 percentage points higher than that of the first quarter. According to the statistics of the Ministry of Commerce， the retail sales of 5，000 key enterprises in January-May was up 39.3%， 10.5 percentage points higher than that of the same period last year.

Consumption for upgrading products developed rapidly. With the further popularization of 4G communication network， the sales of communication equipments of enterprises above designated size in January-May was up 37.6%， over 30% for 6 consecutive months； the sales of 4G mobile phones of 5，000 major retail enterprises monitored by the Ministry of Commerce was up about 1.5 times year on year. Driven by the growth of demands for service like recreation and body-building， the sales of culture， sports and entertainment products grew rapidly. The sales of culture， and sports and entertainments products of 5，000 major retail enterprises monitored by the Ministry of Commerce in May was up 13.7% and 8.9% respectively， 9.0 and 5.9 percentage points higher than that of the same period last year.

Consumption for mass catering and basic living goods quickened. Mass catering consumption has become the mainstream of market， and the revenue of catering in January-May was up 11.5% year on year， 13 percentage points higher than that of the same period last year. Among that， the revenue of the catering enterprises under designated size was up 13.5%， 7.3 percentage points higher than that of the enterprises above designated size. In January-May， the sales of living goods， clothing and food of enterprises above designated size was up 13.5%， 11% and 11.9% respectively， 3.7， 1.3 and 0.8 percentage points higher than that of the same period last year.

Sales of housing and transportation products picked up. With the continuous promotion of upgrading demands for housing and accommodation with intelligent household appliance as the hotspot， in the first five months， sales of household appliances， building materials and furniture of enterprises above designated size was up 10.8%， 17.2% and 16.1% respectively， 3.5， 3 and 1.4 percentage points higher than that of the same period last year. Sales of automobile and petroleum products were steady and picked up. In May， the sales of automobile and petroleum products of enterprises above designated size was up 0.5 and 1.9 percentage points respectively than that of last month. Both production and sales of new energy automobile thrived. In January-May， the production of new energy automobile increased almost 3 times， and the sales of new energy passenger cars was up 1.7 times.

Consumption growth of the rural area was quicker than that of the urban area. Driven by the upgrading consumption demands in the rural market and affected by the policy of e-commerce entering into the rural area， the retail sales of consumer goods in the rural area in the first 5 months was up 11.6% year on year， 1.4 percentage points higher than that of the urban area， contributing 15.4% to the growth of the national total retail sales of consumer goods， 0.8 percentage points higher than that of the same period of last year.

Consumer prices maintained low. In January-May， CPI was up 1.3% year on year， the same as that of the previous month. Among that， CPI was up 1.2% in May， 0.3 percentage points lower than that of the previous month. In 36 large and medium-sized cities monitored by the Ministry of Commerce， the prices of agricultural products were up 0.5% year on year in May. Among that， the prices of fruit， chicken and pork were up 3.8%， 3.7% and 2.2% respectively， while that of mutton， soybean oil and eggs down 13.1%， 2.4% and 1.3% respectively year on year.

Foreign trade

According to the Customs statistics， Chinas total import and export in May 2015 reached RMB 1.97 trillion， down 9.7% year on year （the same as below）. Among them， the export was RMB 1.17 trillion， down 2.8%， and import RMB 0.8 trillion， down 18.1%. The trade surplus was RMB 366.8 billion， up 65%. In terms of the U.S. dollar， the total import and export reached US$ 322.0 billion， down 9.3%， among which， the export was US$ 190.8 billion， down 2.5%， and the import US$ 131.3 billion， down 17.6%. The trade surplus was US$ 59.5 billion， up 64.2%. The main characteristics of the foreign trade in May were as follows：

The export decrease slowed down， and the import remained weak. Affected by the weak foreign demands and the high RMB real effective exchange rate， Chinas export still witnessed a negative growth， but the decrease slowed down 3.5 percentage points slower than the previous month. Affected by the low price of staple commodities and the weak domestic demands， Chinas import remained the decrease， and the decrease was higher than the previous month.

Export to the U.S. grew rapidly， and import from EU countries decreased largely. With the good economy of the U.S. in the second quarter， its import demands picked up. In May， Chinas export to the U.S. was up 7.9%， 4.5 percentage points higher than the previous month. Chinas export to the countries alongside the “One Belt and One Road” maintained a rapid growth， among which， export to Bangladesh， Pakistan， Israel， Saudi Arabia and Egypt increased 45.5%， 24.9%， 23%， 18.6% and 11.5% respectively. Affected by the passive appreciation of RMB， Chinas export to Japan and EU was down 8.3% and 7.5% respectively. Chinas import from EU and BRICS was down 25.5% and 24.1% respectively， dragging the total import growth down 5.5 percentage points.

Export of the general trade stopped decreasing and began to pick up， and the processing trade was still weak. The import and export of the general trade reached RMB 1，102.2 billion， down 7.8%. Among that， the export was up 2.6%， enjoying the first positive growth since March. The import and export of the processing trade reached RMB 605.2 billion， down 12.8%， 3.1 percentage points higher than that of the previous month. Among that， the export and import were down 11.1% and 15.8% respectively. The import and export of the other trades reached RMB 266.1 billion， down 10%， 3.5 percentage points slower than the previous month.

Export of mechanical and electrical products was better than the total export， and the decrease of the price of import and export products expanded. The export of mechanical and electrical products reached RMB 671.4 billion，， down 1.3%， 1.5 percentage points slower than the total export， accounting for 57.4% of the total， up 0.9 percentage points year on year. The export of seven kinds of labor intensive products was RMB 244.9 billion， down 1.7%. Due to the low price of the staple commodities in the international market， the average price of Chinas export was down 2.2%， and that of the import down 12.9%，， 0.7 and 0.1 percentage points higher respectively than that of the same period of the previous month. Among them， the export prices of refined oil， steel and coke were down 40.4%， 26.6% and 13% respectively， dragging the export growth down 1.5 percentage points； the import prices of iron ore， crude oil， refined oil， soybean， liquefied petroleum gas and coal were down 48.7%， 44.5%， 38.4%， 29.1%， 27.4% and 25.2% respectively， dragging the import growth down 8.9 percentage points.

The import and export of Central and Western China were better than that the whole country， and the export of Eastern China picked up. The import and export of Central China reached RMB 146.3 billion and that of Western China was RMB 140.2 billion， down 5.8% and 7.8% respectively， with 3.9 and 1.9 percentage points slower than that of whole country. The import and export of Central and Western China accounted for 14.5% of that of the whole country. The import and export of Eastern China was RMB 168.69 billion， down 10.2%. Among that， the export was down 3.5%， while the export of Shandong， Guangdong and Fujian was up 5.4%， 4.1% and 3.9% respectively.

Export of the private enterprises picked up， but that of the state-owned and foreign invested enterprises still weak. The import and export of private enterprises reached RMB 742 billion， down 6.1%， 2.8 percentage points slower than that of the previous month， among which， the export was up 4.3%， recovering its growth after twomonthsdecrease. The import and export of state-owned enterprises was RMB 315.1 billion， and that of foreign invested enterprises was RMB 916 billion， down 18.5% and 8.8% respectively.

The service outsourcing situation in January - May 2015

In January-May 2015， the contract value of service outsourcing signed by Chinese enterprises reached US$42.5 billion by an increase of 6.3% year on year and the executed contract value registered US$31.08 billion by an increase of 14% year on year. The contract value of offshore service outsourcing totaled US$26.36 billion， with a decrease of 2.6% year on year and the executed contract value reached US$20.46 billion， with an increase of 10.3% year on year. The contract value of onshore service outsourcing was US$16.14 billion with an increase of 24.3% year on year and the executed contract value was US$10.63 billion， with an increase of 21.7% year on year. The followings are the main features：

Firstly， the newly-signed offshore service outsourcing tended to warm back. In May， the contract value of offshore outsourcing newly signed by Chinese enterprises was US$4.63 billion with an increase of 12.4%， reversing the decreasing situation of the newly-signed contract value in April. The contract value of service outsourcing undertaking from the United States was US$920 million， with an increase of 23.7% year on year and the contract value of service outsourcing undertaking from Japan was US$480 million， with an increase of 8.2% year on year.

Secondly， the market potential of the onshore service outsourcing was constantly released. China implemented the development strategy of the “Internet +”， promoted the innovative and integrated development of the internet and service industry and the manufacturing industry， constantly released the market potential of the onshore service outsourcing and promoted the onshore service outsourcing to develop with more than 20% of growth. The “Yangtze River Economic Zone” stands out as an extraordinary example. In January-May， the contract value of onshore service outsourcing of 11 provinces and cities of the “Yangtze River Economic Zone”reached US$12.48 billion and the executed contract value totaled US$8.34 billion， accounting for 77.3% and 78.5% of the country， with an increase of 29.2% and 24.1% year on year respectively.

The situation of import and export of service trade in January - April

Both the service export and import maintained a double-digit growth. Since this year， the pace of service export has quickened and the growth of import has slowed. The gap between the growth of export and import has narrowed. In January-April， the service export was US$74.2 billion， with an increase of 10.7% year on year and the import was US$130.3 billion， with an increase of 13.6% year on year （the growth of service export in 2014 was 8.2 percentage points lower than that of import）. The construction service， the transportation service， the telecommunication， computer and information service mainly drove the growth of the service export， with an increase of 53%， 13.2% and 20.9% year on year respectively. The main destinations of the construction service export were such countries and regions as Hong Kong， UAE， Netherland， the United States， and Malaysia. The computer and information service was mainly exported to such countries and regions as the United States， Singapore， Hong Kong， Japan， England and Netherland. The growth of import was slow because of the decreasing of transportation service， the royalty of intellectual property and the import of professional management and consultant service by 12.7%， 5.8% and 9.4% compared with the same period last year respectively.

The structure of service export industry was optimized. The expansion of the scale of high-value added service export drove the further optimization of the export structure. In January-April， the service export of telecommunication， computer and information reached US$7.42 billion with an increase of 20.9% and the proportion was promoted by 0.8 percentage points compared with the same period last year. The amplification of the computer and information service export was improved by 5.3 percentage points year on year， being a stable and fast growing industry in Chinas service export. The proportion of the export of advertising service， culture and entertainment service and intellectual property royalty was improved compared with the same period last year.

The proportion of the traditional industry in the service export was improved. The continuously exuberant outbound tourism enabled the tourism to become the biggest industry of the service import in China. In JanuaryApril， the proportion of the tourism import reached 39.4%， 9.1 percentage points higher than the same period last year. The transportation service import totaled US$27.4 billion， accounting for 21%， remaining unchanged as the same period last year， ranking the second. The construction service import reached US$3.68 billion and the proportion was improved by 1.9 percentage points. By contrast， the scale of some high-value added service import was reduced. The service import of telecommunication， computer and information reached US$3.21 billion， with a decrease of 3.3% compared with the same period last year and the proportion was reduced by 0.4 percentage points. The structure of service import of China remained to be further optimized.

The trade surplus of some highvalue added service was expanded and the trade deficit was narrowed. Although the traditional transportation service and tourism continued to remain a large-scale trade deficit， the scale of trade surplus of some highvalue added service was expanded. In January-April， the trade surplus of telecommunication， computer and information service reached US$4.2 billion， with an expansion of US$1.38 billion year on year. The trade surplus of professional management and consultant service reached US$5.38 billion， with an expansion of US$780 million. Although the trade of intellectual property royalty showed deficit again， the amount reduced obviously， with a deficit value of US$6.12 billion andUS$670 million less year on year.

The increase trend of service trade in the domestic key strategic layout region was favorable. In 2015， the national key strategic layout region maintains a rapid development as a whole. In January-April， the service import and export volume of 18 provinces （Xinjiang， Shanxi， Ningxia， Gansu， Qinghai， Inner Mongolia， Heilongjiang， Jilin， Liaoning， Guangxi， Yunnan， Tibet， Shanghai， Fujian， Zhejiang， Guangdong， Hainan and Chongqing） relating to the “Belt and Road Initiative” reached US$114.89 billion， accounting for 56.2% of the national total， with a growth of 26.6%， exceeding the average growth of the whole country by 14.1%. The growth of export and import was 14.1% and 34.2% respectively， both higher than the national average growth level. The service import and export volume of three provinces in Northeast China increased 16.5% year on year and the six provinces in the Northwest China increased 16.1%. The service import and export volume of the “Yangtze River Economic Zone” （Shanghai， Jiangsu， Zhejiang， Anhui， Jiangxi， Hubei， Hunan， Chongqing， Sichuan， Yunnan and Guizhou） reached US$83.97 billion， accounting for 41.1% of the national total， with an increase of 17.9% year on year， 7.2 percentage points higher than the national average growth， driving 7% points of the national service import and export. Shanghai took the lead in these cities and its service import and export volume ranked the first in the whole country. The service import and export in Beijing， Tianjin and Hebei increased by 7.7% year on year， accounting for 23.4% of the national total and the service import of Beijing ranked the first in the whole country.