China re­tail sales growth slowed in Oc­to­ber

Kuwait Times - - BUSINESS -

China’s re­tail sales growth slowed last month, gov­ern­ment data showed yes­ter­day, in a wor­ry­ing sign for do­mes­tic de­mand in the world’s sec­ond­largest econ­omy. Re­tail sales in Oc­to­ber grew 10 per­cent from a year ear­lier, miss­ing ex­pec­ta­tions for sales to match the pre­vi­ous month’s pace of 10.7 per­cent, the Na­tional Bu­reau of Sta­tis­tics (NBS) said. Other data for last month showed in­dus­trial out­put growth of 6.1 per­cent, un­changed from Septem­ber and slightly be­low fore­casts in a Bloomberg News sur­vey of econ­o­mists. China is a key driver of the world econ­omy but its ex­pan­sion has slowed sig­nif­i­cantly from the dou­ble-digit years of the past. Now Beijing is seek­ing to make a dif­fi­cult tran­si­tion away from its de­pen­dence on ex­ports and heavy in­dus­try towards con­sump­tion as the key driver of the econ­omy, but the process is prov­ing bumpy.

“It could be the con­sumer par­tic­i­pa­tion in growth is de­clin­ing,” in­de­pen­dent Hong Kong-based an­a­lyst An­drew Col­lier told Bloomberg. “It’s harder for the gov­ern­ment to con­trol re­tail sales than (fixed-as­set in­vest­ment) or in­dus­trial pro­duc­tion, which is heav­ily stat­edriven.” Beijing has ramped up fis­cal stim­u­lus and loose credit to keep the econ­omy on tar­get to meet its 6.5-7 per­cent growth tar­get for the year. Fixedas­set in­vest­ment, a gauge of in­fra­struc­ture spend­ing, rose 8.3 per­cent in the first 10 months of the year. The NBS fig­ures showed an Oc­to­ber jump in realestate in­vest­ment, which grew 6.6 per­cent in the first 10 months, com­pared with 2.0 per­cent in the same pe­riod last year. “Growth mo­men­tum likely got help from steady prop­erty in­vest­ment in Oc­to­ber,” said Zhao Yang of No­mura in a note. But con­cerns about surg­ing hous­ing prices caused author­i­ties to roll out cool­ing mea­sures in ma­jor cities last month, which will slowly take ef­fect and lead to a mod­er­ate slow­down in growth next year, he added.

The fac­tory out­put fig­ures-which showed ac­cel­er­at­ing growth in out­put of steel, glass and ce­ment last mon­thre­flected an in­crease in in­vest­ment spend­ing, said Ju­lian Evans-Pritchard of Cap­i­tal Eco­nom­ics. “Although state-sec­tor in­vest­ment re­mains strong­est, much of the re­cent re­cov­ery has come from a marked re­bound in pri­vate in­vest­ment, which had stag­nated ear­lier this year,” he said. But re­cent poli­cies to rein in credit growth and the hot prop­erty mar­ket will cause those driv­ers to “fiz­zle out” early next year, he added.

Chi­nese bank lend­ing al­most halved month-on-month in Oc­to­ber, of­fi­cial data showed, af­ter a credit surge in Au­gust and Septem­ber sparked of­fi­cial alarm about debt risks.

In­vestors were un­fazed by the data, buy­ing in­fra­struc­ture and coal shares as the bench­mark Shanghai in­dex climbed yes­ter­day, clos­ing above the sym­bolic 3,200-point level for the first time in al­most 10 months. NBS spokesman Mao Shengy­ong said the slow­down in con­sump­tion growth was due mainly to a higher base of com­par­i­son last year when au­to­mo­bile sales surged thanks to gov­ern­ment tax cuts. — AFP

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