China’s industrial output growth last month unexpectedly slowed to a more than 17-year low, while investment also cooled in the latest sign of weakening demand in the world’s second-largest economy as the US ramps up trade pressure.
Industrial output last month grew 5 percent from a year earlier, data from the Chinese National Bureau of Statistics showed yesterday, missing analysts’ expectations of 5.5 percent and well below April’s 5.4 percent. It was the weakest reading since early 2002.
Fixed-asset investment also grew less than expected, reinforcing expectations that Beijing will need to roll out more growth-boosting measures soon.
Chinese Vice Premier Liu He (劉鶴) on Thursday stoked expectations of more stimulus as the US-China trade dispute intensifies, urging regulators to do more to boost the economy and saying that Beijing has plenty of policy tools it can use.
Despite a slew of support measures since last year, China’s cooling economy is still struggling to get back on firmer footing, and investors fear a longer and costlier trade dispute between the world’s two largest economies could trigger a global recession.
Yesterday’s data showed that domestic demand remains sluggish, as suggested by weaker-than-expected import and bank lending data over the past week and gloomy factory surveys last month.
Fixed-asset investment rose 5.6 percent in the January-to-May period from a year earlier, decelerating from 6.1 percent predicted by Reuters and 6.1 percent in the first four month of the year.
Private-sector fixed-asset investment, which accounts for about 60 percent of total investment in China, also showed signs of losing momentum. It rose 5.3 percent, compared with a 5.5 percent rise in the first four months of the year.
Infrastructure investment grew 4 percent, slowing from 4.4 percent.
Analysts have been closely watching for signs of a rebound in infrastructure investment as Beijing ramps up spending on road, rail and port projects, which would boost construction-related industries from steel mills to cement makers.
Real-estate investment, a key economic growth driver, also showed signs of fatigue. It rose 11.2 percent in the first five months, slowing from 11.9 percent.
Retail sales bucked the downbeat trend, rising 8.6 percent in May from a year earlier and picking up from a 7.2 percent rise in April, which was a 16-year low.
Analysts surveyed by Reuters had expected a rebound to 8.1 percent, but some said that it was likely due to higher inflation rather than any turnaround in weak consumer confidence.
Earlier this week, China’s auto association reported the worst-ever monthly drop in sales in the world’s biggest vehicle market in May as the economy slowed and provinces implemented tougher emissions standards.