NBS: China's economy remains stable, investment accelerates in Jan-Feb

Lloyd Doyle
March 17, 2019

China's industrial output slowed during the first two months of the year as unemployment rose, official data showed today. Output growth at China's factories and workshops for the first two months slowed to 5.3 percent on-year, from 5.7 percent in December, a multi-year low and short of forecasts.

Housing transactions slowed as property sales by floor area fell 3.6 percent year-on-year in the first two months of 2019, easing from the 0.9 percent gain in December.

Beijing is rolling out more support measures to avert a sharper slowdown, but many analysts do not expect activity to convincingly bottom out until summer. Chinese Premier Li Keqiang last week laid out a lower growth target of 6.0-6.5 percent this year, from 6.6 percent growth in 2018, which was already the slowest pace for nearly three decades.

China's domestic demand to remain steady.

The bureau also said that the total property investment in the first two months reached 1.2 trillion yuan, with 72.1 percent used in residential buildings.

Credit conditions have been on the looser side in recent months as China has cut the amount of cash banks keep as reserves five times since previous year to boost lending to companies.


Falling property sales in Jan-Feb due to Lunar New Year factors.

But fixed-asset investment rose 6.1 percent, while retail sales rose 8.2 percent, both more than expected.

However, retail sales remain near a 15-year low, said Julian Evans-Pritchard of Capital Economics in a note, adding that "the near-term outlook still looks downbeat".

China's survey-based jobless rate rose to 5.3 percent in February, from 4.9 percent in December, though it was below the government's target of 5.5 percent this year.

China is trying to engineer a construction boom to rekindle demand and kickstart the economy, even as it steps up support measures to keep cash-starved smaller companies afloat, ranging from tax cuts to financial incentives for firms which do not cut staff.

Xining, the capital of Qinghai province in central China by the Tibetan Plateau, was the top performer last month with a monthly price increase of 2.3 percent. Land transaction fees in 40 major Chinese cities fell 20.9 percent in January-February period from the same time a year earlier, according to the state-run Securities Times. The catering industry reported a 9.7-percent increase in revenue.

Other reports by Iphone Fresh

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