Advertisement
China economy
EconomyChina Economy

China’s economic slump continues as manufacturing growth slows sharply, investment growth hits 20-year low

  • Industrial production grew by 4.7 per cent in October, down from 5.8 per cent in September, and below analysts’ forecasts
  • Retail sales and fixed asset investment growth also declined in October, as pressure builds on Beijing to arrest the downturn in the economy

Reading Time:4 minutes
Why you can trust SCMP
China’s industrial production, a measure of growth in sectors such as manufacturing, mining and utilities, expanded by 4.7 per cent cent last month, down from 5.8 per cent in September. Photo: Bloomberg
Finbarr Berminghamin Brussels

Growth in China’s industrial economy fell sharply in October, as a broad-based slowdown in manufacturing was again clear in figures released on Thursday.

Industrial production, a measure of growth in sectors such as manufacturing, mining and utilities, expanded by 4.7 per cent cent last month, down from 5.8 per cent in September. This was below analysts’ expectations of 5.4 per cent growth. September’s figure had rebounded from a 17-year low of 4.4 per cent, recorded in August.

In another piece of data released by China’s National Bureau of Statistics (NBS) on Thursday, fixed asset investment, purchases of capital goods, real estate and infrastructure, grew by 5.2 per cent in the first 10 months of the year, below analysts’ expectations of 5.4 per cent and down from September’s reading, also of 5.4 per cent. This was the lowest growth figure since records began in November 1999.

Retail sales, a key metric of consumption in the world’s most populous nation, grew by 7.2 per cent in October from a year previous, this was below analysts’ forecasts in a Bloomberg poll, which predicted no change from September’s 7.8 per cent growth. This was the lowest monthly growth rate since April.

Advertisement
Other data from October – better than expected results from the Caixin survey of small, private manufacturers, smaller than expected declines in exports and imports – had suggested some semblance of stability in the world’s second largest economy. Thursday’s numbers, however, suggest that the multiple and significant headwinds facing China persist.
Furthermore, while the manufacturing slump has dominated headlines this year, the sag in investment will be of real concern to policymakers in Beijing. The trade war with the United States has had significant material impact on data. Exports fell by 0.9 per cent in October, better than September’s 3.2 per cent decline and ahead of analysts’ forecasts. Imports too beat expectations with a 6.4 per cent fall, but this marked the ninth monthly decline in a row.

However, analysts have long said that the greatest impact will be on investment. Companies now seem to be holding back on making large purchases, as the chill effect of US President Donald Trump’s tariffs percolate through the Chinese economy.

Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x