China factory data prompts spending calls
CHINA REVEALED fresh evidence yesterday of slowing activity in the world’s second-largest economy, with sliding factory output and investment prompting calls for Beijing to do more to prop up flagging growth.
According to official figures released by China’s statistics bureau, value-added industrial output rose 8.9 per cent last month from a year earlier, down from 9.2 per cent in July and the slowest growth since May 2009.
Last month investment in fixed assets increased 18.8 per cent from a year earlier, down from 20.4 per cent growth in July.
The scope to use monetary policy to shore up growth appears to be narrowing, as the annual rate of consumer inflation rose to 2 per cent last month from July’s 30-month low of 1.8 per cent.
Europe’s debt crisis and sluggish growth in the US is hitting China’s two main export markets, and the economy is on track to register its slowest rate of growth in 13 years at about 8 per cent.
President Hu Jintao said the pressure from falling exports was creating difficulties. Speaking at the Asia-Pacific Economic Cooperation CEO Summit in Vladivostok, he promised to do more to boost domestic demand and promote more balanced growth. “Economic growth is facing notable downward pressure . . . and exporters are facing more difficulties,” Mr Hu said. “We have an arduous task of creating jobs for new entrants to the labour force.”
He said the economy was characterised by a “lack of balance, co-ordination and sustainability” and the country would promote “inclusive growth”.
Asia’s biggest economy grew 7.6 per cent in the second quarter from a year earlier, the slowest pace in three years, after the government moved to slow inflation and surging property prices in the wake of a 2009 stimulus. Wang Jun, a researcher with the China Centre for International Economic Exchanges, expects inflation to retreat again in the fourth quarter. – (Additional reporting: Financial Times Limited 2012)