China’s consumers, factories take a beating as economic gloom deepens
BEIJING: China’s November retail sales grew at their weakest pace since 2003 and industrial output rose the least in nearly three years as the economy lost further momentum, heaping pressure on Beijing to defuse its trade dispute with the United States.
The world’s second-largest economy has been losing momentum in recent quarters as a multi-year government campaign to curb shadow lending put increasing financial strains on companies in a blow to production and investment.
The stresses on broad activity have been compounded by a sharp escalation in China’s trade row with the United States, which has threatened to fracture global supply chains, chill investment, exports and growth.
The slowdown in Chinese industries and the trade tensions have started to weigh on consumer sentiment, tapping the brakes on retail sales. Big-ticket items have been the first to be hit, with auto sales declining since May.
Retail sales rose 8.1 per cent in November from a year earlier, data from the National Bureau of Statistics showed on Friday, below expectations for an 8.8 per cent rise and the slowest since May 2003. In October, sales increased 8.6 per cent.
Auto sales fell a sharp 10.0 per cent from a year earlier, in line with industry data showing sales dived 14 per cent in November — the steepest drop in nearly seven years.
Industrial output rose 5.4 per cent year-on-year in November, missing analysts’ estimates and matching the pace seen in January-february 2016. Factory output had been expected to grow 5.9 per cent, unchanged from October’s pace.
Over the weekend, China reported far softer than expected November exports and imports, reflecting slower global demand and waning domestic factory narrow.
The weaker November industrial output and retail sales growth numbers showed that downward pressure on the economy is increasing, said Mao Shengyong, spokesman at the statistics bureau.
But China is on track to hit its 2018 economic growth target of around 6.5 per cent, Mao told reporters. “The need for cutting taxes, fees and interest rates has further increased,” said Wang Jun, chief economist at Zhongyuan Bank in Beijing. “Insufficient demand has become the main problem.”
The slackening demand in China is starting to worry its trading partners too. In Japan, machinery makers and auto manufacturers have seen their monthly orders to China falling, some by double-digits. activity as profit margins