BEIJING, Sept 15 (Reuters) – China’s industrial output picked up pace in August though sluggish consumption and a worsening investment slump reinforced concerns over deepening economic imbalances.
Industrial output grew 5.2% from a year earlier in August, quickening from a 4.5% increase in July and beating expectations for a 4.8% rise, data released by the National Bureau of Statistics showed on Tuesday.
Retail sales, a gauge of consumer activity, rose 0.4%, slowing from a 0.6% gain in July and below an expected 0.8% rise. Fixed-asset investment, which includes infrastructure and property investment, declined 7.2% in the first eight months, matching forecast and compared with a 6.7% drop through July.
The figures underline the continuing mismatch between resilient production and exports on one hand, and fragile household consumption and investment on the other, and raised the stakes for more stimulus measures to address the weaknesses in the economy.
China’s economy entered the second half of the year on a weak footing, with factory output, consumption and investment all struggling to gain momentum.
While factory activity improved last month, it remained in contraction and services activity stayed sluggish.
Extreme weather likely remained a drag on activity. Four typhoons made landfall in China during August, disrupting operations in the east-coast manufacturing and logistics belt.
Beijing has responded with faster government bond issuance and expanded loan interest subsidies for small private firms and consumers, while the central bank has pledged additional policy support without signalling explicit cuts to policy rates or banks’ reserve-requirement ratio.
“September could represent an important policy window to revive business confidence ahead of October’s Golden Week holidays,” analysts at ANZ said.
(Reporting by Kevin Yao, Yukun Zhang and Ethan Wang; Editing by Shri Navaratnam)
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