dChan - Q Origins Project Archive

BEIJING (Reuters) - China on Wednesday reported surprisingly weaker growth in industrial output and retail sales for April, reinforcing expectations that Beijing needs to roll out more stimulus measures as the trade war with the United States escalates.

Investment also stumbled unexpectedly, suggesting China’s economy is still struggling for better footing even as a sharp hike in U.S. tariffs on Friday ratcheted up pressure on its exporters.

Growth in industrial output slowed more than expected to 5.4 percent in April from a year earlier, pulling back from a surprising strong 4-1/2 year high of 8.5% in March, which some analysts had suspected was boosted by seasonal and temporary factors.

Analysts polled by Reuters had forecast output would grow 6.5% for the month.

China’s exports unexpectedly shrank in April in the face of U.S. tariffs and weaker global demand, while factory surveys suggest new export orders remain sluggish.

Retail sales were also worse than expected, with the headline number rising 7.2%, the slowest pace since May 2003, data from the National Bureau of Statistics (NBS) showed.

That compared with March’s 8.7% and forecasts of 8.6%, highlighting concerns that consumers are growing less confident as the economic slows and the trade war drags on.

Earlier this week, industry data showed automobile sales in China fell 14.6% in April on-year, marking the 10th consecutive month of decline.

INVESTMENT

Fixed-asset investment growth slowed to 6.1% in the first four months of this year. Analyst polled by Reuters had expected it to rise 6.4%, picking up from 6.3% in the first quarter of this year.

Private sector fixed-asset investment grew 5.5% in the same period, easing sharply from an increase of 6.4% in the Jan-March period. Private investment accounts for about 60 percent of overall investment in China.

Growth in infrastructure spending, a powerful economic driver, held steady at 4.4% on-year in Jan-April from the first quarter of this year.

China is trying to engineer a construction boom to rekindle demand, even as it steps up support measures to keep cash-starved smaller companies afloat, ranging from tax cuts to financial incentives for firms which do not lay off staff.

https://www.reuters.com/article/us-china-economy-activity/china-april-industrial-output-cools-retail-sales-growth-falls-to-16-yr-low-as-trade-risks-rise-idUSKCN1SL05J