China industrial production to its lowest rate of … – Boursorama

China industrial production to its lowest rate of … – Boursorama

Investors to an array of quotations on the Shanghai Stock Exchange, September 12, 2014 (AFP / Johannes Eisele)

Industrial production in China marked a sharp slowdown in August, recording its lowest growth rate in more than five years, the government said Saturday, the latest sign of a softening of the second world economy.

According to the National Bureau of Statistics (NBS), China’s industrial output in August was inflated by 6.9% year on year, against an increase of 9% in July. This represents the lowest increase in the annual rate since December 2008 and the beginning of the financial crisis.

This figure stands also well below the forecast of analysts surveyed by Dow Jones agency, who had forecast an increase of 8.7%.

Retail sales grew them last month by 11.9% year on year, marking a significant slowdown in consumer spending after rising 12.2% in July.

As for fixed investment –who reflect expenditures in infrastructures–, they were up 16.5% year on year in the first eight months of 2014 (January-August), a lower market expectations figure, blaming a slowdown again.

This burst of disappointing data “reinforces the idea that the dynamics of growth in China has slowed and much faster than expected, “commented Li-Gang Liu and Zhou Hao, analysts ANZ Bank

-. Crumbling stimulus –

because according to experts, the impact of the strong cooling in the housing sector, the mainstay of the country’s growth, after years of overheating, but also a slowdown in credit expansion.

The measures taken since April by Beijing to stimulate activity seemed powerless to stop the recent bout of gloom.

While economic growth dropped to 7.4% in the first quarter, the lowest in 18 months, Beijing had introduced tax reductions, facilities to boost infrastructure investment and relaxed banking rules to encourage lending to small businesses and the rural sector.

But after a lull in the second quarter (the growth was raised to 7.5%), this “mini-stimulus” seems to have fizzled, and by July, indicators – including manufacturing -. suggested a slowdown in the recovery

Meanwhile, a collapse of bank lending in July fueled worries about credit demand and activity, with a return in August.

industries suffer more, noted Jiang Yuan, a researcher NBS , pointing to a slowdown in auto production.

“A morose and difficult international environment also weighed on exports”, which rose 9.4% year on year in August against 14.5% in July, said Jiang, said in a statement

-.’s goal threatened growth? –

The weaker housing market – where the average house price record monthly declines since May – could weigh sustainably: property and construction supply blood directly and indirectly, up to 20% of Chinese GDP according some estimates.

Beijing is aiming for annual growth of 7.5%, and to reach it, the authorities, although they exclude any massive stimulus package could bring themselves to increase their blows stimulus to the economy.

“Past experience suggests that China needs an increase of about 9% of its industrial production to ensure a GDP growth of 7.5%,” Experts stressed ANZ.

“Unless imminent monetary easing, China probably will miss its growth target, and the brutal economic downturn will derail its structural reforms,” ​​they suggested.

Inflation contained to 2%, the lowest in four months, leaving room for maneuver in the government, and Prime Minister Li Keqiang warned Wednesday that Beijing “had a range of tools macroeconomic complete at its disposal. “

In the same speech, Li was nevertheless stressed its intention to” continue reforms “already committed to” rebalance “the economic model of the country without offering new details or original ideas.

Beijing wants to beef up domestic consumption and promote better allocation of investment away from sides of unprofitable activities, and cropping large public groups and industrial overcapacity.

“Do not focus on short-term fluctuations, but look at the overall trend, the bigger picture,” warned the prime minister, said it was the “solid” growth in China and ” resistant. “

Copyright © 2014 AFP. All rights of reproduction and distribution reserved.

All information displayed on this section (dispatches, photographs, logos) are protected by intellectual property rights owned by AFP. Therefore, none of this information may be reproduced, modified, transmitted, redistributed, translated, sold, exploited commercially or reused in any way whatsoever without the prior written consent of the AFP. AFP shall not be held liable for any delays, errors, omissions, which may not be excluded nor for the consequences of actions or transactions made on the basis of this information.

Read also