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China Focus: China's industrial output speeds up amid slowing economy

(Xinhua)    18:42, May 13, 2015

BEIJING, May 13 -- Growth of China's industrial output picked up in April after hitting a six-year low in March, pointing to tentative signs of improvement for the world's second-largest economy.

Industrial output grew 5.9 percent year on year in April, up from 5.6-percent growth in March, when growth was at its lowest monthly level since December 2008, the National Bureau of Statistics (NBS) announced on Wednesday.

Industrial output, officially called industrial value added, is used to measure the activity of designated large enterprises that have an annual turnover of at least 20 million yuan (3.22 million U.S. dollars).

The marginal improvement was an encouraging and rare sign against the backdrop of slowing economic growth.

China's economic growth slowed to 7 percent in the first quarter this year, down from 7.3 percent in the previous quarter.

After more than a decade of double-digit growth, annual industrial growth slowed to 9.7 percent in 2013, and then to 8.3 percent last year.

Despite the slowdown, the industrial structure continued to improve, NBS statistician Jiang Yuan said, noting increasing government promotion of innovation and accelerating expansion of emerging industries.

The industrial value added of the high-tech sector and equipment manufacturing jumped by 10.5 percent, outpacing overall growth by 4.6 percentage points, Jiang said.

However, other economic indicators released on the same day by the NBS indicated there is still a bumpy ride ahead.

In the first four months of 2015, China's fixed asset investment rose 12 percent from a year earlier, down from the 13.5-percent growth registered in the first quarter (Q1).

Investment in the previously red-hot property sector rose 6 percent year on year, falling from the 8.5-percent increase seen in Q1, suggesting lingering weakness in the sector.

In April, retail sales grew 10 percent from a year ago, slightly lower than the 10.2 percent posted in March.

NBS spokesperson Sheng Laiyun said China still faces a complicated external environment as both developed and developing countries have been recovering sluggishly, while the domestic situation has indicated more effort is needed to prop up growth.

In the latest attempt by policy makers to bolster the slowing economy, the People's Bank of China, the central bank, announced an interest rates cut of 25 basis points on Sunday. It was the third such cut since November.

"Although today's data does not reflect the impact of the latest easing measures, the deceleration in economic activity suggests that policy easing likely remains behind the curve," a report by HSBC Global Research said.

It forecast another cut of 25 basis points to the policy rate, and a cut of 50 basis points to the reserve ratio in the third quarter.

Sharing the view, Steven Zhang, vice president of Morgan Stanley Huaxin Securities, also expects repeated easing measures in the next few months but he was more optimistic about the economic trend.

"We believe economic growth bottomed out in April and a mild rebound can be expected as pro-growth measures will be extended in the second quarter," Zhang said.

Sheng said the economy kept in "the proper range" and economic driving forces have accumulated in the first four months.

He cited a narrowed decline in home sales, surging infrastructure investment, robust private capital, rising high-tech industries and stable economic outlook.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Du Mingming,Bianji)

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