ZCZC
BCN-18
CHINA-INDUSTRY-RETAIL-INDICATOR
Chinese consumers pull back, but other indicators stabilise
BEIJING, Nov 14, 2018 (BSS/AFP) – Chinese consumer spending slowed in
October, official data showed Wednesday, adding to worries over the world’s
second-largest economy, but investment and industrial production appeared to
stabilise.
Concerns about China have increased in recent months after third-quarter
growth came in at its slowest pace in nine years, and as trade frictions with
the US have ratcheted upwards.
Chinese officials are currently engaging with their US counterparts as the
two economic giants try to work out a compromise on trade ahead of President
Xi Jinping’s meeting with Donald Trump later this month at the G20 gathering.
The National Bureau of Statistics said on Wednesday that retail sales
slowed to an 8.6 percent year-on-year increase in October, slightly short of
estimates and down from 9.2 percent in September.
The NBS blamed the deceleration on consumers holding off from making
purchases until Singles Day, China’s annual discount shopping bonanza that
was held on November 11.
“Given uncertain and unstable factors abroad, there are concerns over the
slower though stable economic development which is facing downward pressure,”
bureau spokeswoman Liu Aihua told a news briefing.
“The world economy and trade growth momentum have weakened while
international financial markets have been turbulent.”
Exports to the major United States 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 grow the economy.
The trade row with the US has sapped market confidence, dragging down
Chinese equities and the yuan currency.
On the positive side, fixed-asset investment, a key economic driver,
showed signs of rebounding.
It expanded 5.7 percent on-year for the first ten months of the year,
picking up after hitting record lows this summer as Beijing’s push to get big
projects moving this autumn lifted infrastructure spending.
Output at factories and workshops ticked up 5.9 percent in October, an
improvement on the 5.8 percent in September, according to the NBS, and ahead
of the 5.8 percent forecast in a Bloomberg News survey.
“Despite the uptick in industrial output and investment, we doubt that
economic growth has bottomed out just yet,” Julian Evans-Pritchard of Capital
Economics wrote in a research note.
He said local governments had held off on issuing bonds in recent weeks as
they face budget limits.
“US tariffs have, if anything, acted as a prop to exports recently (due to
front-loading by US importers) but are set to become a drag early next year,”
he said.
BSS/AFP/HR/1008