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Mixed China Data Underscores Fragility Of Recovery

Mixed China Data Underscores Fragility Of Recovery
5/13/2013 3:45 AM ET

China's industrial production rose less than expected, while retail sales growth was in line with expectations, offering very little conviction in the strength of the recovery underway in the world's second largest economy. The growth in the country's fixed asset investment was weaker than expected.

Industrial production increased 9.3 percent year-on-year in April, faster than the 8.9 percent rise in the previous month. However, the output growth was below forecast of 9.4 percent growth. In the first four months of the year, production was up 9.4 percent compared to the same period last year.

Retail sales increased 12.8 percent annually in April, as expected. This compares with the 12.6 percent rise recorded in March. In the January-April period, sales were up 12.5 percent compared to the same period of 2012.

Urban fixed asset investment in China increased 20.6 percent in the January-April period compared with forecast for 21 percent growth. In the first three months of the year, investment was up 20.9 percent.

China's GDP growth eased to 7.7 percent in the first quarter from the 7.9 percent expansion in the fourth quarter, which ended seven quarters of economic slowdown.

The most recent purchasing managers' surveys have pointed to a slowdown in both manufacturing and service sector activities at the beginning of the second quarter.

However, China reported strong April export and import figures earlier this month. That said, the data is interpreted cautiously due to widespread skepticism over its accuracy.

The International Monetary Fund expects China to grow 8 percent this year and by 8.2 percent in 2014, weaker than its previously forecast. The World Bank had also cut its 2013 growth outlook for the economy to 8.3 percent.

Recently, China stepped up its economic reforms to rebalance the economy, while also struggling to keep growth on track.

by RTT Staff Writer

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