Chinese consumer spending grew at its slowest pace in 15 years and factories eased up last month, official data showed yesterday, raising the prospect of fresh stimulus measures as the economy sputters.
The Chinese National Bureau of Statistics said retail sales growth slowed to 8.1 percent, the weakest monthly pace since May 2003 and short of forecasts.
That comes after data last weekend showed a sharp drop in growth for imports and exports, as well as easing inflation, while the economy expanded at its slowest pace for nine years in the third quarter.
Chinese National Bureau of Statistics spokesman Mao Shengyong (毛盛勇) said there “was little anxiety” about hitting China’s annual economic growth target of 6.5 percent this year, which is well down from the 6.9 percent registered last year, but he added: “The environment is still severe and complex both at home and abroad, the economy is stable, but still subject to changes and slowdown, and the downward pressure is mounting.”
He said that China must maintain employment.
Exports to the crucial US market have held up so far, but analysts forecast a dimming picture in the months ahead, reinforcing the need for China to rely on its legions of domestic consumers to fuel the economy.
“Talking about the impact of Sino-US trade frictions — it may directly affect imports and exports, but so far the impact is not large,” Mao said, adding that growth began to fall last month.
In another worrying sign, growth in output at factories and workshops fell to a 33-month low of 5.4 percent year-on-year, from 5.9 percent in October.
Growth at foreign-invested enterprises was sluggish.
China’s auto sales have fallen sharply since this summer and analysts expect the nation to register its first annual sales decline in three decades.
“The latest data show an economy that is under pressure on both the external and domestic front, with policy efforts to shore up growth still falling short,” Capital Economics China economist Julian Evans-Pritchard said.
“The data lend support to the market’s view that things will get worse in China before they get better, this despite investment rising,” OANDA Corp head of Asia-Pacific trade Stephen Innes said.
On the positive side, fixed-asset investment, a key economic driver, rose 5.9 percent in the first 11 months of the year, recovering from record lows in the summer.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure