The solid start for the Chinese economy in 2018 has been confirmed by the release yesterday of industrial production and other data for January and February (to smooth out the impact of the late Lunar New Year in mid-February).
The National Statistics Bureau data showed industrial production and urban fixed asset investment had a strong start to 2018, with growth for both measures coming in above estimates.
Industrial production grew 7.2% year on year in the first two months of 2018, the fastest pace of growth since June last year. That was up from 6.2% in December.
Urban fixed-asset investment, meanwhile, rose 7.9% in the first two months of 2018, rising from 7.2% in December. Investment by state-controlled firms to the end of February grew 9.2% while that of private sector companies was up 8.1%.
Last week trade data for January and February showed a sharp rise in exports and a solid increase in imports 9helped by higher prices). Consumer price inflation rose by more than expected, but producer price inflation slowed.
In something of a surprise Chinese crude steel output rose sharply in the two month period, even with cuts to output and curbs on production to help cut winter pollution levels.
The National Bureau of Statistics said 136.82 million tonnes of crude steel was produced in January-February, up 5.9% from a year earlier,. The Bureau did not produce monthly breakdowns, but averaging the figure based on daily out put of 2.32 million tonnes showed a rise of more than 7% from December and up from 2.2 million tonnes for the first two months of 2017.
Retail sales rose 9.7% in the first two months of the year, up from 9.4% growth in December. Sales at larger businesses grew 8.3% while online sales jumped 35.6%.
But the latest President Trump trade threat overshadowed the solid data.
Trump is seeking to impose tariffs on up to $US60 billion, perhaps $US100 billion of Chinese imports in the very near future and will target the technology and telecommunications sectors, as well as toys. Walmart and Target (not to mention Amazon won’t be happy).
Trump’s threats follow the imposition of tariffs on steel and aluminium last week.
Reuters reported that the production data included some interesting figures – such as the output of computers, telecommunications equipment and other electronics rose 12.1% on year, extending a long period of double-digit growth, while output of industrial robots rose around 25%.
In a surprise, real estate investment rose 9.9% the fastest pace in three years, though property sales softened in the face of government measures to cool heated housing prices.
