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China August industrial output up 6.1% year-on-year: govt
By Kelly OLSEN
Beijing (AFP) Sept 13, 2015


Growth in China's industrial production and retail sales accelerated in August, government data showed Sunday, but the figures will do little to ease international concern about the world's second-largest economy.

Industrial production, which measures output at factories, workshops and mines, rose 6.1 percent year-on-year, the National Bureau of Statistics (NBS) announced, describing the sector as still weak.

The figure outpaced July's year-on-year gain of 6.0 percent but was below a median forecast of 6.5 percent in a survey of economists by Bloomberg News.

Retail sales increased 10.8 percent in August from a year earlier, exceeding the previous month's 10.5 percent and also besting the median estimate in the Bloomberg survey of 10.6 percent.

The figures are the latest closely watched snapshot of the Asian giant, a key driver of global economic growth, after a series of disappointing indicators during the current third quarter.

The most recent official and private manufacturing surveys indicate that the sector is contracting.

And inflation data released Thursday showed consumer price rises accelerating but factory gate prices in deflation for the 42nd straight month and falling at the fastest pace in six years.

Reacting to Sunday's data, Jiang Yuan, an NBS statistician, described the industrial situation as still on a "shaky foundation" despite the slight rebound in production last month.

"The market demand at home and abroad for industrial products is still weak now," Jiang said in a statement on the NBS website. "The downward pressure on industrial production is still big."

China's economy expanded 7.3 percent in 2014, its weakest performance in 24 years, and growth has slowed further this year. Gross domestic product (GDP) increased 7.0 percent in each of the first two quarters of this year.

Authorities are officially targeting growth of about 7.0 percent this year, though economists increasingly see that goal as difficult to achieve given recent weakness.

"The economy is showing no sign of recovery," said Ding Shuang, chief China economist at Standard Chartered in Hong Kong, Bloomberg reported.

"From the perspective of monetary policy, the government has done what it can, but demand from the real economy needs to pick up to really make use of that."

Authorities have been aggressively dealing with the slowing economy, cutting interest rates five times since last November as well as reducing bank reserve requirements to spur lending.

But Chinese officials have come under increasing pressure due to concerns about slowing growth, a shock devaluation last month of the yuan currency and questions about their attempts to prop up the country's stock markets.

Premier Li Keqiang on Thursday took advantage of an address at a World Economic Forum meeting in China to try to reassure his audience that officials are in control.

Li stressed that while the country has problems, it poses no risk to the global economy and will not experience a dreaded "hard landing".

But economists generally believe more stimulatory steps are necessary to shore up growth.

The finance ministry on Tuesday said it would adopt "stronger" fiscal policies, including speeding up major construction projects.

Also Sunday the NBS said that fixed-asset investment (FAI), a measure of government spending on infrastructure, expanded 10.9 percent on-year in the January-August period, coming in below the median Bloomberg forecast of a gain of 11.2 percent, and remaining the lowest since 2000.

Jeremy Stevens, Beijing-based Asia economist at South Africa's Standard Bank, said he was particularly concerned about slowing FAI growth.

"The economy is down-drifting and won't change," he told AFP in an email.

China's leaders are trying to pull off a much-touted retooling of the country's economic model to one in which consumer spending rather than investment plays the leading role in driving growth.

But even the retail sales gain is not as robust as it seems, according to Lin Tao, another NBS statistician.

Lin said on the website that stripping out a gain in August in the retail price of commodities means that the real growth rate for the indicator was just 10.4 percent, or roughly the "same level as that of last month", referring to July's 10.5 percent increase.


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