China re­tail sales growth shows Oc­to­ber slow­down

The Myanmar Times - - International Business -

CHINA’S re­tail sales growth slowed to 10 per­cent on-year in Oc­to­ber, govern­ment data showed yes­ter­day, miss­ing ex­pec­ta­tions in a wor­ry­ing sign for do­mes­tic de­mand in the world’s sec­ond-largest econ­omy.

Oc­to­ber’s in­dus­trial out­put growth matched the pre­vi­ous month’s fig­ure at 6.1pc, the Na­tional Bureau of Sta­tis­tics (NBS) said, also 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 dif­fi­cult tran­si­tion away from a 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,” said an­a­lyst An­drew Col­lier. “It’s harder for the govern­ment to con­trol re­tail sales than [fixed-as­set in­vest­ment] or in­dus­trial pro­duc­tion, which is heav­ily state-driven.”

Bei­jing has ramped up fis­cal stim­u­lus and loose credit to keep the econ­omy on tar­get to meet its 6.5 to 7pc growth tar­get for the year.

Fixed-as­set in­vest­ment, a gauge of in­fra­struc­ture spend­ing, rose 8.3pc in the first 10 months of the year.

The NBS fig­ures show an Oc­to­ber jump in real-es­tate in­vest­ment, which grew 6.6pc in the first 10 months, com­pared with 2pc 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 growth slow­down next year, he added.

The fac­tory out­put fig­ures – which showed ac­cel­er­at­ing growth in out­put of steel, glass and ce­ment last month – re­flected an in­crease in in­vest­ment spend­ing, said Ju­lian Evans-Pritchard of Cap­i­tal Eco­nom­ics.

“Although state-sec­tor in­vest­ment re­mains strong­est, much of the re­cov­ery has come from a marked re­bound in pri­vate in­vest­ment, which had stag­nated ear­lier this year,” he said, adding that re­cent poli­cies to rein in credit growth and the hot prop­erty mar­ket will cause the econ­omy to “fiz­zle out” early next year.

NBS spokesman Mao Shengy­ong said the slow­down in con­sump­tion growth was due mainly to a higher base of com­par­i­son last year as au­to­mo­bile sales surged thanks to govern­ment tax cuts. –

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.