3-month high for China industrial growth: gov’t

The China Post - - INTERNATIONAL - BY KELLY OLSEN

Growth in China’s industrial pro­duc­tion hit a three-month high in May, fig­ures showed Thurs­day, while ex­pan­sion in re­tail sales re­bounded from a nine-year low in cau­tiously pos­i­tive signs for the world’s sec­ond-largest econ­omy.

Industrial out­put, which mea­sures out­put at fac­to­ries, work­shops and mines, rose 6.1 per­cent year-on-year in May, the Na­tional Bureau of Statis­tics (NBS) said in a state­ment.

Re­tail sales, a key in­di­ca­tor of con­sumer spend­ing, in­creased 10.1 per­cent in the same month, the NBS said.

The industrial out­put fig­ure was the high­est since a read­ing of 6.8 per­cent growth in Jan­uaryFe­bru­ary, when the data were re­leased for two months to iron out dis­tor­tions re­lated to Chi­nese New Year.

The May in­crease was also above the 5.9 per­cent recorded in April and marginally above the me­dian 6.0 per­cent rise in a fore­cast of econ­o­mists by Bloomberg News.

The re­tail sales re­sult, mean­while, was just above April’s 10.0 per­cent rise, which was a nineyear low.

The re­sults came as China’s econ­omy has con­tin­ued to slow in 2015 af­ter grow­ing at its weak­est pace — 7.4 per­cent — in nearly a quar­ter-cen­tury last year.

In the first three months of this year, gross do­mes­tic prod­uct (GDP) ex­panded 7.0 per­cent, the worst quar­terly re­sult in six years.

China’s au­thor­i­ties are try­ing to en­gi­neer a con­trolled slow­down as they seek to trans­form the coun­try’s growth model to one in which con­sumer spend­ing be­comes the key driver, as op­posed to heavy in­fra­struc­ture in­vest­ment.

In a sign that the makeover is pro­ceed­ing, the NBS also an­nounced that growth in fixed as­set in­vest­ment — a mea­sure of gov­ern­ment spend­ing on in­fra­struc­ture — slowed fur­ther, ex­pand­ing 11.4 per­cent year-on-year in the Jan­uary-May pe­riod, the low­est since De­cem­ber 2000, ac­cord­ing to pre­vi­ous fig­ures.

Of­fi­cials, how­ever, fear too fast a de­cel­er­a­tion in eco­nomic growth and have car­ried out stim­u­la­tory mea­sures in­clud­ing low­er­ing in­ter­est rates to help en­sure the slow­down does not get out of hand.

The cen­tral Peo­ple’s Bank of China (PBOC) has cut bench­mark in­ter­est rates three times since Novem­ber and also im­ple­mented re­duc­tions in the amount of funds banks must keep on hand in a bid to en­cour­age lend­ing and help pump up eco­nomic growth.

Separately, the cen­tral bank said Thurs­day that China’s bank lend­ing ex­panded in May and the broader money sup­ply also grew, a sign its ef­forts to loosen pol­icy to boost growth are bear­ing fruit.

Still, an­a­lysts are broadly ex­pect­ing the PBOC to take fur­ther eas­ing steps to boost the econ­omy.

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