China Jan-Feb ac­tiv­ity data weak, pol­icy eas­ing ex­pected

The Pak Banker - - 6BUSINESS -

SHANG­HAI: China's ac­tiv­ity data re­mained weak in the first two months of 2016, with fac­tory out­put growth hit­ting the weak­est since the global fi­nan­cial cri­sis, keep­ing pres­sure on pol­i­cy­mak­ers to do more to avert a sharper show­down in the world's se­cond-largest econ­omy.

Fac­tory out­put grew 5.4 per­cent in Jan­uary and Fe­bru­ary from a year ear­lier, data re­leased by the Na­tional Bureau of Sta­tis­tics (NBS) showed, slow­ing from a 5.9 per­cent rise in De­cem­ber to the weak­est since Novem­ber 2008.

Econ­o­mists polled by Reuters had ex­pected fac­tory out­put to grow 5.6 per­cent in the first two months from a year ear­lier.

Retail sales, a gauge of do­mes­tic con­sump­tion, rose 10.2 per­cent in the first two months - the weak­est since May 2015, ver­sus ex­pec­ta­tions of a 10.8 per­cent rise.

How­ever, fixed-as­set in­vest­ment, a cru­cial driver China's econ­omy, rose 10.2 per­cent in the first two months from a year ear­lier, beat­ing ex­pec­ta­tions of 9.5 per­cent.

The govern­ment re­ports com­bined Jan­uary and Fe­bru­ary growth fig­ures for the fac­tory out­put, in­vest­ment and retail sales, to smooth out sea­sonal dis­tor­tions caused by the long Lu­nar New Year hol­i­day, when most com­pa­nies shut down.

The govern­ment has set a growth tar­get of 6.5 per­cent to 7 per­cent for this year. Top lead­ers have al­ready pledged "sup­ply­side struc­tural re­forms" to tackle ex­cess fac­tory ca­pac­ity and are also ex­pected to step up pol­icy sup­port to help avert an eco­nomic hard land­ing. China's econ­omy ex­panded an an­nual 6.9 per­cent in 2015, its slow­est pace in 25 years.

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