Wednesday, November 11, 2015

China's Factory Output, Investment Decline, Retail Sales up

China's factory output and investment weakened in October while retail sales growth edged up, suggesting economic growth has stabilized but has yet to revive despite repeated interest rate cuts and other stimulus.

The data reported Wednesday reflected the two-speed nature of the economy as communist leaders try to encourage growth based on consumer spending instead of trade, investment and heavy industry.

Economic growth decelerated to a six-year low of 6.9 percent in the latest quarter. Communist leaders insist they are comfortable with slower growth after the last decade's explosive double-digit expansion but face pressure to avoid a politically dangerous spike in job losses.

President Xi Jinping indicated last week the party plans to aim for at least 6.5 percent growth in coming years. He said that was necessary to achieve its goal of doubling the economy's size by 2020 from its 2010 level.

Beijing has cut interest rates six times since last November. Private sector analysts say they expect more stimulus targeting segments of the economy but no more large-scale measures.

October's retail sales grew 11 percent over a year earlier, up from the previous month's 10.9 percent in a positive sign for Beijing's efforts to encourage consumer-oriented industries.

Growth in factory output decelerated to 5.6 percent from September's 5.7 percent, according to the National Bureau of Statistics. Growth in investment edged down to 10.2 percent for the first 10 months of the year from the 10.3 percent in the first nine months.

No comments: