China’s economy started the year on a firm footing as its old growth engines gathered pace, with steel and aluminum rebounding as prices rallied and home sales remaining resilient.
Industrial production climbed 6.3 percent from a year earlier in January and last month combined, versus median estimate of 6.2 percent in Bloomberg economist survey.
Retail sales advanced 9.5 percent in the first two months, missing economists’ forecasts as auto sales dropped after a tax increase on small-engine cars. Fixed-asset investment increased 8.9 percent during the same period.
The reports show investment, property and industrial drivers helping to boost growth across the economy as top leaders conclude their legislative gathering and look ahead toward a twice-a-decade leadership shift in the fourth quarter.
Steadier expansion, which lifted the Bloomberg Intelligence China monthly growth tracker to 6.99 percent last month, gives the People’s Bank of China more maneuvering room as it boosts money-market rates to contain corporate leverage.
Chinese Premier Li Keqiang (李克強) announced at the opening of the Chinese National People’s Congress this month an expansion target of 6.5 percent or higher for the full-year and cut the M2 money supply goal from 13 percent last year to 12 percent.
“Following the solid data for the start of the year and the signaling of a slightly more dovish policy stance during the recent NPC compared to what we had expected, we now expect GDP growth to slow to 6.5 percent this year, up from 6.3 percent before,” Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong, wrote in a report. “High uncertainty calls for vigilance of policymaking, but at least the current growth momentum gives policy some two-way leeway.”
“The data pointed to a good start to the year. Fixed-asset investment got a boost largely because of infrastructure projects. It shows that the proactive fiscal policy is playing out well,” said Tommy Xie (謝東明), an economist at OCBC Bank in Singapore. “Infrastructure will be generally strong this year thanks to public-private partnerships. Credit data in February also showed that investment is getting adequate financial support.”
“China’s economy is opening the year with a good start, although pro-growth policies to shore up consumption in coming months are needed,” said Gao Yuwei (高玉偉), a researcher at the Bank of China Ltd’s Institute of International Finance in Beijing. “Auto sales have slowed to weigh on consumption after two years of splurging.”
“The latest data support the slight tightening bias in People’s Bank of China policy,” Bloomberg Intelligence economists Tom Orlik and Fielding Chen (陳世淵) wrote in a report. “Strength in real-estate sales and construction — if sustained — would mean upside risks to Bloomberg Intelligence Economics’ 6.3 percent growth forecast for the year.”
In a sign that the economy’s momentum is building, private fixed-asset investment accelerated to 6.7 percent growth from a year earlier in the first two months of this year, property development investment increased 8.9 percent in the period and the value of new homes sold rose 23 percent to 912 billion yuan (US$132 billion).
A reading of services output increased 8.2 percent in January and last month.
Automobile sales fell 1 percent from a year earlier, a breakdown of the retail sales numbers showed.
Slower retail sales were due to the high base effect from car sales last year, an NBS spokesman said at a briefing in Beijing.
Employment was stable in January and last month, while economic improvement continued with better fundamentals during the period, the spokesman said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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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