China’s economic slowdown deepened with unexpected decelerations in industrial output, investment and retail sales, testing policy makers’ reluctance to step up monetary stimulus.
Factory production rose 8.7 percent in April from a year earlier, the National Bureau of Statistics said Tuesday in Beijing, compared with the 8.9 percent median estimate of analysts surveyed by Bloomberg News. Fixed-asset investment increased 17.3 percent in the first four months of the year, and retail sales advanced 11.9 percent in April.
The figures signal risks are increasing that China will miss the year’s expansion goal of about 7.5 percent, as the government’s efforts to counter the slowdown, including tax breaks and spending on railways and housing, have yet to gain traction. Leaders are trying to rein in a credit boom and curb pollution, and President Xi Jinping said last week that the nation needs to adapt to a “new normal” of slower growth.
“The economy is still slowing,” Wang Tao, chief China economist at UBS AG in Hong Kong, said in an e-mail. The government’s “mini-stimulus has not yet turned around the growth momentum,” and the government may ease credit by loosening restrictions on lending to homebuyers and local-government financing vehicles, Wang said.
The Shanghai Composite Index fell 0.3 percent as of 2:05 p.m. local time. The yuan weakened 0.05 percent to 6.2407 per dollar.
Factory-production growth compared with an 8.8 percent increase in March. The advance in retail sales compared with the 12.2 percent median projection of analysts, and the same gain in March.
The median estimate for January-to-April expansion in fixed-asset investment excluding rural households was 17.7 percent, after a 17.6 percent rise in the first three months of this year.
China’s growth fundamentals haven’t changed and the country is still in a “significant period of strategic opportunity,” President Xi said in a Xinhua News Agency report published May 10. At the same time, the government must prevent risks and take “timely countermeasures to reduce potential negative effects,” he said. (Bloomberg)
