The Chinese economy held ground last month following new measures to cool property markets in almost two dozen big cities.
Industrial production rose 6.1 percent from a year earlier last month, compared with median estimate of 6.2 percent in a Bloomberg survey and 6.1 percent in September. Retail sales growth slowed to 10 percent, missing estimates for 10.7 percent. Fixed-asset investment rose 8.3 percent in first 10 months of the year.
Any sign the world’s second-largest economy is losing steam may add to uncertainty in the global economy, which already faces the prospect that US president-elect Donald Trump will impose punitive tariffs on Chinese imports. However, for now, it is all about domestic drivers, with efforts to rein in property prices tapping the brakes on China’s consumer.
“It’s probably consistent with policy remaining supportive of growth, but no further ramping up or ramping down,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “The moderation in retail sales growth is a bit of a disappointment given a desire to continue rebalancing the economy toward greater consumer spending, but then again what other country in the world has 10 percent retail sales growth?”
China’s shoppers’ ongoing spending power was on display on Friday, when Alibaba Group Holding Ltd’s (阿里巴巴) Singles’ Day posted record sales of 120.7 billion yuan (US$17.8 billion), easily topping last year’s 91.2 billion yuan.
“We need to see another month of data, but it could be the consumer participation in growth is declining,” said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA. “It’s harder for the government to control retail sales than FAI [fixed-asset investment] or industrial production, which is heavily state-driven.”
Even amid curbs in major cities, property development investment rose 6.6 percent from a year earlier in the first 10 months, compared with 5.8 percent in the first nine. Growth of private investment stabilized to 2.9 percent in the first 10 months from a year earlier.
“Growth momentum is stabilizing,” said Zhao Yang (趙揚), Nomura Holdings Inc’s chief China economist. “But looking ahead, headwinds remain in the economy, as property markets in tier-1 cities have started to cool down. The cooling property sales in tier-1 cities will transmit to lower-tier cities and eventually drag property investment growth.”
Credit and money supply data released on Friday showed a moderation of total credit and new loans, while money supply increased slightly. Aggregate financing decreased to 896.3 billion yuan last month, versus 1.72 trillion yuan the prior month.
“Today’s data suggest that the recent recovery in economic activity continued,” said Julian Evans-Pritchard, China economist at Capital Economics in Singapore. “However, with credit growth now slowing and the property market beginning to cool the drivers of the recent recovery look set to fizzle out early next year.”
Separately, the Chinese Ministry of Finance said that fiscal spending slumped 12.5 percent from a year earlier. That is because of an unfavorable comparison to October last year, which included a surge of spending on urbanization and transportation infrastructure to stabilize the economy, officials said in a statement.
“Another month of solid growth data is good news for China and should open space for the government to continue rotating policy toward tamping down rapid credit growth and an upward spiral in house prices,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a report. “This time though, the surprise win of Donald Trump in the US presidential election and the challenging outlook for China’s own property sector mean the period in the comfort zone of may be short-lived.”
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Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
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