Satellite Activity Data Reveals Mixed Trends in Chinese Economy: Retail Sales Rise, Property Market Falls (SNN#20)


SpaceKnow investigates Chinese retail sales and Chinese housing price trends using China Retail Parking Index and China Cement Storage Index.

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In December 2022, the Chinese government ended the zero-covid policy that dominated the world’s second-biggest economy for almost three years. As China was the key driver of world economic growth in the past decades, the speed of its recovery following the lockdowns matters.

Like many analysts, Spacknow monitors the Chinese economy closely. We have multiple datasets available on China’s key sectors. These datasets or indices are derived from satellite activity data, not opinions. 

Let’s start with the positive, the latest available data for the January-February period point to recovery after the COVID period, with industrial production increasing by 2.4% compared to last year. Retail sales also did well, increasing by 3.5 percent and recovering from a drop in December. Figure 1 shows the Spaceknow Retail Parking Index, which tracks cars in parking areas next to shopping malls. The index closely matches the changes in retail sales in China. Both indices are seen rising, however, the Spaceknow index is not leaving the negative territory… This may be due to the rising importance of online sales, which our index does not capture. We do track logistics locations in China which can help track online purchases.

Figure 1: Year-on-Year percentage changes of Spaceknow Retail Parking Index against Chinese Retail Trade (Year-on-Year changes) Source: Spaceknow, National Bureau of Statistics of China

On the other hand, the Chinese government sets its lowest GDP growth target in decades, just 5%. A possible explanation could be the Chinese economy missing its growth forecast of 5.5 percent last year. In reality, the strict lockdowns brought growth down to only 3% in 2021.

A clear candidate for China’s most troubled sector of the economy last year is the property market. Chinese developers, heavily reliant on presales of unfinished housing, came under pressure following last year’s regulatory tightening. The sector remains in trouble, with falling investment and downward pressure on house prices. This is also visible in Figure 2 below, showing changes in house prices in 70 Chinese major cities, staying in the negative territory for several months. The Figure also shows that Spaceknow’s Cement Manufacturing Index is able to follow the Housing Price Index.

Figure 2: 30 day rolling-sum of Cement Manufacturing Index against the month-on-month changes in House Price Index

Above we have shown two examples from Spaceknow’s growing list of satellite-based indices mapping the world’s second-biggest economy, from car manufacturing to coal production. We selected the indices above because they document conflicting evidence from the Chinese economy – rising retail sales and a falling property market.

We will keep watching the Chinese economy closely and bring new insights as the Chinese post-Covid future becomes more evident. Until then, if near-real-time insights derived from satellite data matter to your organization, consider subscribing to our indices today.

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