Further confirmation yesterday that the slowdown in the pace of economic activity in China has continued into 2015 and possibly quickened.
Data for January and February (combined because of the variable impact around the timing of the Lunar New Year/Spring Festival) showed industrial output slowed, as did retail sales, urban investment and house sales.
Industrial output slowed to an annual rate of just 6.8% in both months. Month on month, industrial output in February grew 0.45 from January, the data showed.
That was well under market forecasts for growth of 7.8% and the 8.3% (all annual rates) reported for December.
Power generation, a key indicator, rose 1.9% in January and February from a year earlier, well below the 3.2% rate seen in all of 2014, which was the slowest growth rate in 16 years.
Fixed-asset investment, a crucial driver of the world’s second-largest economy, rose 13.9% in January and February from a year ago, against a forecast of 15%.
Retail sales rose 10.7% the first two months of the year, again missing forecasts for 11.7%. That’s the slowest growth in retail sales for 11 years.
Last week Chinese policymakers officially downgraded China’s growth target to “around 7 per cent”, from 7.5% and 7.4% in 2014, the lowest level since 1990.
The figures came a day after data showed deflationary pressures in the factory sector intensified in February (with deflation running at 4.8% in February against 4.3% in January).
The data for both months came after two rate cuts in November and late February and two reductions in bank reserve asset ratios.
But the data will reinforce expectations of more interest rate cuts and other policy change to try and avert a sharper slowdown in the world’s second-biggest economy.
Investment in China’s property sector rose 10.4% year on year in the first two months of 2015, the National Bureau of Statistics said.
But China’s housing sales fell 16.7% in the first two months of the year, a major shock seeing the rate cut in November and two cuts to bank reserve ratios were supposed to boost ending.
The statistics bureau releases combined data for January and February to limit distortions related to the Lunar New Year holiday.
Growth in property investment slowed to 10.4% in the first two months this year, compared with 19.3% growth recorded in the same period last year. For 2014, property investment rose 10.5%.
