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China's Industrial Output Growth Accelerates; Retail Sales Gain Slows


China's industrial production and fixed asset investment growth accelerated more-than-expected at the start of the year, while retail sales grew at a slower pace from a year ago.

Data from the National Bureau of Statistics showed that industrial production climbed 6.3 percent in January to February from the same period of last year, faster than the 6.0 percent increase seen in December and the 6.2 percent rise economists had forecast.

A similar faster growth was last seen in August 2016. Data for the first two months of the year are combined to even out the impact of the Lunar New Year holiday.

Meanwhile, annual growth in retail sales slowed to 9.5 percent in the January to February period from 10.9 percent in December. Sales were expected to expand 10.6 percent.

Fixed asset investment annual growth improved to 8.9 percent in January to February compared to the expected growth of 8.2 percent. In 2016, investment had advanced only 8.1 percent.

On balance, today's data suggest that China's economy remained strong at the start of 2017, Julian Evans-Pritchard, an economist at Capital Economics, said.

But this strength remains heavily reliant on rapid investment growth that will be difficult to sustain given clear signals that the fiscal and monetary policy stance will be less supportive this year, the economist noted.

As such, the economist continues to anticipate a slowdown in economic activity in the coming quarters.

China targets about 6.5 percent economic growth this year, which is slower than the 6.7 percent expansion achieved in 2016.

Premier Li Keqiang has said that the growth target is in line with the aim to create a 'moderately prosperous society'.

by RTTNews Staff Writer

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