China’s economy woes short-lived
BEIJING: Chinese industrial production growth eased in April, according to figures out Wednesday, as personal consumption also showed weakness despite government moves to boost the economy.
However, economists argued that the data was just a short-term slowdown before more robust growth would be recorded later in the year.
Industrial output -- a main gauge of activity in plants across China -- rose 7.3 percent last month from a year earlier, the National Bureau of Statistics (NBS) said, down from 8.3 percent growth in March, and 11.0 percent in February.
"It was a small fluctuation in a generally upgoing trend," said Lian Ping, a Shanghai-based economist with the Bank of Communications.
"It's rather unlikely it will go back to a rate of around five percent," he said, referring to output figures of little more than five percent seen at the end of last year.
Since then Beijing has introduced a four-trillion-yuan (580 billion dollar) stimulus package aimed at boosting growth at home as the world's third biggest economy comes under strain from a slump in its key export sector.
Exports fell 22.6 percent in April to 91.9 billion yuan from a year earlier in the sixth straight monthly decline, according to figures from the customs bureau.
The package is heavily focused on infrastructure investment, and various economic indicators show it is starting to have an impact.
April's production of cement, for example, a key component in construction projects, increased 12.9 percent from a year earlier, the bureau said.
Investment in urban fixed assets, a key indicator of spending on infrastructure, was up 30.5 percent in the first four months of 2009 compared with the same period a year ago, the government said Tuesday.
"It's likely we will start to see industrial output growth picking up into the second half of the year," said Robert Subbaraman, a Hong Kong-based economist with Nomura International.
"While exports are going to weaken and remain weak, we think the fiscal stimulus is going to be very strong," he said.
However, retail sales, the main measure of consumer spending, grew by 14.8 percent year on year in April. The figure, revealed by the NBS, compared with 22 percent growth in April 2008.
In the first four months of 2009, retail sales expanded by 15 percent compared with the same period in 2008, the bureau said.
For all of last year, retail sales were up 21.6 percent, previously released government data showed.
Xing Ziqiang, economist at the China International Capital Corporation, said pointers were good for future consumption as the past months have seen a steady rise in the purchasing managers' index, a general measure of the mood in the manufacturing sector.
"This shows that the pressure from unemployment and deflation may be lessening, and this in turn could bolster consumer spending in future," he said in a research note.
The World Bank has forecast that China's economy will grow by just 6.5 percent in 2009, the lowest level since 1990. It expanded by 6.1 percent in the first quarter of the year.