While international and domestic demand vulnerabilities and the drawn-out Sino-U.S., China’s industrial output grew significantly slower than expected in October. In the world’s second-largest economy, trade war weighed on activity.
Indicators also showed other sectors slowing ascertainable and missing expectations with growth in retail sales back close to a 16-year trough and the lowest reported growth in fixed asset investment.
The disappointing economic data adds to Beijing’s case of rolling out raw economic support after China’s economic growth in the third quarter slowed to its weakest pace in nearly three decades.
While global and domestic demand vulnerabilities and the drawn-out Sino-U.S., China’s industrial output grew significantly slower than expected in October. In the world’s second-largest economy, trade war weighed on activity.
Industrial production rise 4.7 percent year-on-year in October, data released on Thursday from the National Statistics Bureau showed below the 5.4 percent growth median prediction in a Reuters poll.
Indicators also showed other sectors slowing significantly and missing expectations with growth in retail sales back close to a 16-year trough and the lowest reported growth in fixed asset investment.
The disappointing economic data adds to Beijing’s case of rolling out raw economic support after China’s economic growth has slowed in the third quarter to its weakest pace in nearly three decades as the bruising U.S. trade war struck factory production.
Broad activity in China’s manufacturing sector remains low with weekend data showing factory gate prices dropping in more than three years in October at their fastest pace.
China’s official Purchasing Managers ‘ Index (PMI) also reveals activity remaining in contraction in the factory sector for a sixth straight month of the month.
Capital Economics China Economist Martin Lynge Rasmussen said, “Admittedly, optimism surrounding a phase-one U.S.-China trade deal could provide a boost to corporate investment in the near term,”
“But even if a minor deal is agreed in the months ahead, this would merely allow the focus to shift to the more intractable issues we believe will eventually lead to a breakdown of trade talks.The case for further monetary easing remains intact.”
Other data on Thursday showed the growth in property investment in China slowing year-on-year in the first 10 months of 2019. The Chinese-U.S. tariff war has hit global demand, disrupted supply chains, and upset financial markets.
While some indications of recent progress in superpower trade deals have cheered investors, both sides ‘ officials have so far avoided any firm commitments to end their dispute. On manufacturers and their order books, this uncertainty has continued to weigh.
Data from Thursday also showed that fixed asset investment, a key driver of economic growth, rose 5.2% from January to October, compared to an estimated 5.4% rise. Investment in fixed assets in the private sector, which accounts for 60% of the total investment in the country, grew by 4.4% in January-October.
Chinese State Council on Wednesday said Beijing would lower the threshold for minimum capital ratio for some investment projects in infrastructure. In October, retail sales rise 7.2 percent year-on-year, missing 7.9 percent expected growth and matching April’s more than 16-year low hit.
Over the past couple of months, customers have been affected by higher food prices as pork and other meat prices soared. At the same time, consumers are reluctant to make large purchases with declining auto sales in October for the 16th straight month, data shown on Monday.


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