China’s April factory output and investment slow, as growth dials back
The world’s second-largest economy dialed back a gear in April as authorities crack down on the nation’s swelling financial leverage.
- Industrial output rose 6.5 per cent last month from a year earlier, compared to 7 per cent seen by economists and 7.6 per cent in March
- Retail sales increased 10.7 per cent versus 10.8 per cent seen by analysts
- Fixed-asset investment excluding rural areas expanded 8.9 per cent for the first four months, compared to a median estimate of 9.1 per cent
Growth momentum has softened after a strong first quarter as policy makers seize the window to curb shadow lending and leverage. While equity and credit markets have been shaken by the campaign, economic fundamentals remain robust as reflation boosts company profits and external demand gets a boost from a pick up in global growth.
“The impact of tightening on the real economy is manageable, ” Morgan Stanley economists led by Robin Xing wrote in a recent note. “Stronger exports and private capex in the manufacturing sector, both less credit-intensive, should help compensate for a drop in investment growth in credit-intensive housing investment or government-driven public investment due to policy tightening.”