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 Growth in factory output cooled to 6 percent in April, the National
Bureau of Statistics (NBS) said on Saturday, disappointing analysts
who expected it to rise 6.5 percent on an annual basis after an
increase of 6.8 percent the prior month.
China's fixed-asset investment growth eased to 10.5 percent
year-on-year in the January-April period, missing market
expectations of 10.9 percent, and down from the first quarter's 10.7
percent.
Fixed investment by private firms continued to slow, indicating
private businesses remain skeptical of economic prospects.
Investment by private firms rose 5.2 percent year-on-year in
January-April, down from 5.7 percent growth in the first quarter.
"It appears that all the engines suddenly lost momentum, and growth
outlook has turned soft as well," Zhou Hao, economist at Commerzbank
in Singapore, said in a research note.
"At the end of the day, we have acknowledge that China is still
struggling."
Reuters reported on Saturday that China's banking regulator has sent
an urgent notice to banks telling them to clear bottlenecks holding
back lending to private firms.
In its data announcement, the statistics bureau said "Because the
total amount of private investment is relatively large, its
continued slowdown could restrain stable growth, and requires a high
degree of attention."
MARCH DATA SPARKED HOPE
Retail sales growth in April, which captures both private and
government purchasing, rose 10.1 percent on an annual basis, slower
than expected. Analysts had forecast sales would rise 10.5 percent
on an annual basis, the same percentage increase as reported for
March.
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It was upbeat March data that sparked hopes China's economy was picking up in a
wake of a more than year-long blitz of fiscal, monetary and administrative
stimulus measures. A recovering property market has also boosted demand for raw
materials, giving a boost to long ailing heavy industries such as steel mills.
But much of the data on April, which included weaker-than-expected exports and
imports, plus soft factory activity surveys, continued to underline lingering
weakness in the broader economy.
The only bright spot was investment in housing, which grew 9.7 percent in April
from a year earlier, according to Reuters calculations, keeping even with
March's pace.
China's economic growth has cooled to 25-year lows, weighed down by a
combination of weak demand at home and abroad, factory overcapacity and
increasing amounts of debt.
The government has made reducing the capacity glut one of its top priorities,
and has vowed to put "zombie" companies out of business. But economists expect
authorities to move slowly to avoid a sharp jump in unemployment.
(Additional reporting by Elias Glenn; Editing by Richard Borsuk)
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