China economic growth slows sharply in April, even before higher US trade tariffs take effect
- Industrial production growth – the output of industrial sectors in China’s economy, including manufacturing – fell to 5.4 per cent from 8.5 per cent in March
- Retail sales, a measure of consumer demand in China, grew by 7.2 per cent in April, well below 8.7 per cent rate in March and lowest in 13 years
China’s economy looked to have had its growth slow sharply in April, the last month before new US trade war tariffs take effect, with both industrial production and retail sales growth posting significant declines.
The big picture to be gleaned from Wednesday’s data dump is that China’s economy is losing the momentum it gained in the first quarter, at a time when it is being sucked into an ever-intensifying trade war with the US. Over the past week, the world’s two largest economies have exchanged tit-for-tat tariffs, as it looked like chances of a near-term trade deal – which had appeared to be growing only two weeks ago – have dwindled.
Industrial production – a measure of the output of the industrial sectors in China’s economy, including manufacturing, mining and utilities – grew by 5.4 per cent in April from a year earlier. This was well down from 8.5 per cent in March and below a poll of economists conducted by Bloomberg, which had predicted growth of 6.5 per cent. This was also the lowest reading since November last year.
Within the industrial sector, manufacturing output grew by 5.3 per cent year-on-year, down from 8.5 per cent last month. This will spark fears over the ability of Chinese producers to deal with an escalating trade war with the US, which will see them pay higher tariffs both for imports and exports where US suppliers or buyers are involved.