China’s economy sees weak start to 2015, spurring calls for more policy easing
Industrial output grew 6.8 per cent in the January-February period from a year earlier, the worst since December 2008
Mainland China’s economy saw a weak start with industrial output, retail sales, and investment growth posting multi-year lows and all missing forecasts, fuelling calls for the government to ease policy further to spur demand.
The downbeat activity suggested that recent cuts in interest rates and banks’ reserve requirement ratio have failed to bolster sluggish demand as deflationary pressures and overcapacity curbed corporate expansion.
However, analysts expect infrastructure investment will be accelerated from this month as the government seeks to avoid any risks of a hard landing in the economy.
“The mix of the real activity indicators suggests the effects of monetary policy easing effort so far has remained limited,” said Liu Li-Gang, chief economist of Greater China at ANZ Bank.
Liu predicted that gross domestic product in the first quarter may grow by less than 7 per cent in the first quarter, after easing to a 24-year low of 7.4 per cent in 2014.
Industrial output grew 6.8 per cent in the January-February period from a year earlier, the worst since December 2008, data from the National Bureau of Statistics showed. The pace was below market consensus for 7.7 per cent growth.
Fixed-asset investment rose 13.9 per cent in the first two months, below the 15.0 per cent expectation and compared with a gain of 15.7 per cent in 2014 as a whole.