[ad_1]
China's manufacturing output slowed at its weakest pace ever recorded earlier this year, a sign that the economy remained under pressure from US tariffs and weaker domestic demand despite the fact that the economy was weaker. a series of economic stimulus measures in recent months.
The monthly data released on Thursday provides a clear overview of the results of the world's second largest economy compared to the first few months of this year. The Chinese Bureau of Statistics does not publish data on January activities alone. Instead, it brings together the months of January and February to eliminate the distortions resulting from the lunar new year holiday calendar, which is different each year.
Factory output, an indicator of the country's crucial manufacturing sector, increased by 5.3% year-on-year, compared to 5.7% in December. This is indeed the lowest reading since the beginning of this data series in 1995. Although January 2001 was technically weaker, the Bureau of Statistics published monthly data for January and February separately, which suggests that the figure reflected the distortions of the lunar new year.
US tariffs are probably partly responsible for the weakness of industrial production. Trade data released last week show that Chinese exports recorded the largest decline in three years.
"Because of trade friction, many factories rushed to handle imports and exports before the lunar new year. At present, they are mostly in a cautious mode of observation as they wait to see if the tariffs will be raised, "said Lin Longpeng, chief market badyst at Guotai Junan Securities in Shenzhen.
Other data released Thursday show a slightly more optimistic picture. Retail sales, an indicator of household consumption, rose 8.2% in January and February, the same level as in December, and slightly higher than the consensus rate of 8.1%, according to a report. Reuters poll. Analysts cited income tax cuts, which came into effect at the beginning of the year, as a reason for increased consumption.
Capital investment – which tracks spending on housing, factories, machinery and public infrastructure – rose 6.1% from February to February, compared with 5.9% in January and ahead of expectations of 6%.
But under the investment figure, badysts point out that the economic situation is less optimistic. The faster growth of investment in housing is responsible for the overall acceleration, but this category includes land sales, which do not represent a productive economic activity.
Other housing indicators, such as sales growth and floor area under construction, point to a weakening real estate market.
Investments in infrastructure and manufacturing both slowed down.
"The slowdown in Chinese growth has worsened between January and February," wrote in a note Thursday Ting Lu, chief economist for China at Nomura in Hong Kong. "We expect Beijing to adopt supportive policies over the coming months and continue to believe that deregulation of real estate markets in big cities is the key to unlocking the resumption of growth."
Lu revised down his first quarter gross domestic product growth forecast by 0.1 percentage point to 6.2 percent.
To follow @ gabewildau on Twitter
Additional reports by Yizhen Jia in Shanghai and Alice Woodhouse in Hong Kong
[ad_2]
Source link
