China industrial output slows to 17-year low in May amid U.S. trade row

18, Jun. 2019

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TOKYO, NNA - China's industrial output growth hit the slowest pace in 17 years in May, data from the National Bureau of Statistics released Friday showed.

Key Points:

―― Industrial output grew 5.0 percent in May from a year earlier, the weakest reading since a 2.7 percent increase in May 2002, following a 5.4 percent expansion in April.

―― Production in 38 out of the 41 industries tracked in the data rose from a year earlier, led by steel, smelting and rolled products, up 11.7 percent, and computers, telecommunications and other electronics equipment up 10.6 percent. Vehicle output fell 4.7 percent.

Takeaway:

―― The slowdown was due to the escalating U.S.-China trade dispute, and downward pressure on output is likely to increase, a Chinese official told reporters.

―― Downside risks to China’s economy are growing. Fixed-asset investment rose 5.6 percent in the January-May period from a year earlier, slowing from a 6.1 percent increase in the first four months of the year. Retail sales climbed 6.4 percent on year in May in real terms, up from a 5.1 percent rise in April, but this was largely because there were more holidays in May, while sales have been trending down.

―― Economists expect Beijing to conduct more fiscal and monetary policy measures to support growth, even at the cost of allowing borrowing while the bad debt problem has not been resolved.

(Kim Jong Un oversees strike drill on May 4, 2019)
(Kim Jong Un oversees strike drill on May 4, 2019)