Breaking News
0

China's Investment Slowdown Worsens as Industry, Retail Hold Up

Stock MarketsSep 14, 2018 15:51
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. China's Investment Slowdown Worsens as Industry, Retail Hold Up

(Bloomberg) -- China’s economic momentum weakened a notch in August, with a continued slowdown in investment overshadowing solid retail sales and industrial production data.

  • Industrial output rose 6.1 percent in August from a year earlier, versus a projected 6.1 percent in a Bloomberg survey and 6 percent the previous month
  • Retail sales expanded 9.0 percent from a year earlier, versus a forecast 8.8 percent
  • Fixed-asset investment rose 5.3 percent year-on-year in the first eight months, compared with an estimated 5.6 percent and 5.5 percent the previous month
  • The surveyed jobless rate in urban areas stood at 5.0 percent, versus 5.1 percent in July

Today’s data indicate that while industrial output and consumption are improving slightly, the policies the government has announced in recent months to spur investment have yet to take root. Credit data in August were stronger than expected overall, although the growth in bank lending is still slowing due to the effects of the campaign to cut leverage.

"China’s economy is on a gradual deceleration trend, but at this moment it’s still fine," Larry Hu, a Hong Kong-based economist at Macquarie Securities Ltd, said on Bloomberg TV. "The government won’t change the direction of deleveraging. They will only change the pace of it, because the economy is still fine at this stage."

Infrastructure investment slowed to 4.2 percent in the first eight months, the slowest since the data series started in 2014. That means policies to expedite such spending haven’t fed through to construction yet.

"Despite the credit easing measures, the demand side has failed to catch up," said Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group Ltd. in Hong Kong. "It takes time. On the bright side, we see that both corporate and local governments have increased bond issuance. Activity will likely pick up later this year."

Output of computer and communication gadgets surged 17.1 percent from a year earlier, hinting at front-loading by exporters assuming that more tariffs from the U.S. will hit.

However, there are some signs that one risk to the economy may be receding, with China and the U.S. talking about resuming talks over their trade dispute. Although the differences between the two sides are still vast and trust is limited after the collapse of earlier talks in May, if successful, the negotiations would remove one threat for the economy and the government.

China's Investment Slowdown Worsens as Industry, Retail Hold Up
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email