China December factory growth eases as pollution measures bite
Data confirms gradual, but slow economic slowdown
BEIJING: Growth in China’s manufacturing sector slowed slightly in December as a punishing crackdown on air pollution and a cooling property market start to weigh on the world’s second-largest economy.
The data support the view that the economy is beginning to gradually lose steam after growing by a forecastbeating 6.9 percent in the first nine months of the year, but the findings did not appear to suggest a risk of sharper slowdown at this point. The official Purchasing Managers’ Index (PMI) released on Sunday dipped to 51.6 in December, down from 51.8 in November and in line with forecasts from economists in a Reuters poll. But the overall reading still appeared relatively solid, and marked the 18th straight month that the sector has expanded. The 50point level divides growth from contraction on a monthly basis.
The figures showed that China’s full-year 2017 economic growth would be at about 6.9 percent and around 6.5 percent for 2018, according to the China Federation of Logistics and Purchasing, which compiles the data. Both predictions would be slightly stronger than those in a Reuters poll.
“Overall, 2017’s economic performance continues to be steady and good, establishing a generally good foundation for 2018,” the federation said. “Recent PMI surveys show companies are confident for economic development in the new year, with production and operating activity expectation indices showing significant improvement.”
Service sector growth remains robust
On a roll
Boosted by hefty government infrastructure spending, a resilient property market and unexpected strength in exports, China’s manufacturing and industrial firms have been a major driver behind solid economic growth this year, with their strong appetite for raw materials boosting global commodity prices. However, a slowdown has started to take hold in the last few months due to a wide-ranging combination of government measures, from a crackdown on smog in heavily industrialized northern provinces to continued curbs on the housing market which are weighing on property investment.
Sources have told Reuters that Chinese leaders are likely to stick with a growth target of around 6.5 percent for 2018, the same as in 2017, even as they continue efforts to defuse the risks from a rapid build-up of debt. In a further sign of resilience, growth in China’s services sector, which was already robust, kicked up another notch in December, a sister survey showed. —Reuters