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China factory output, investment sluggish as old economy slows
[BEIJING] China's industrial production and investment slowed further in October, showing the government's pro-growth measures are yet to revive the nation's old economic engines. Retail sales defied the weakness, rising more than economists forecast.
Industrial output rose 5.6 per cent in October from a year earlier, the National Statistics Bureau said Wednesday, below the 5.8 per cent median estimate of economists surveyed by Bloomberg and compared with September's 5.7 per cent. Fixed-asset investment increased 10.2 per cent in the first 10 months, while retail sales climbed 11 per cent in October.
China's leaders are seeking to transition from an investment-driven, manufacturing-dominated economy to a more consumption and services-led one in the next five years while maintaining growth of at least 6.5 per cent a year. With the real estate sector stalling, manufacturing deteriorating, and inflation muted, policy makers are under pressure to step up stimulus as new growth drivers aren't picking up the slack quickly enough.
The better-than-expected economic growth figure last quarter "did not alleviate downside risks facing the economy," Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, wrote in a note ahead of the data. Liu wrote that the central bank "will remain accommodative and keep market interest rates steadily low." The retail sales result compared with a median economist projection of 10.9 per cent. Wednesday is an annual e-commerce shopping bonanza known as Singles' Day in China. Transactions on this year's event passed 57.1 billion yuan (S$12.8 billion) before midday, eclipsing the 2014 mark with another 12 hours still to go.
China's consumer inflation waned in October while factory- gate deflation extended a record streak of negative readings, data Tuesday showed. That followed a tepid trade report suggesting the world's second-biggest economy isn't likely to get a near-term boost from global demand as overseas shipments dropped 6.9 per cent in October in dollar terms from a year earlier.