Chinese industrial output grew at its slowest annual rate for 22 months in October, the government said today, as factories shifted down a gear in response to a concerted campaign to curb investment and credit.
Production in October was up 14.7 per cent from a year earlier, compared with 16.1 per cent growth in September.
Excluding figures for January and February, when the timing of the Lunar New Year disrupts production schedules, the growth rate was the weakest since December 2004.
Industrial output growth has fallen from a peak of 19.5 per cent in June under the weight of a combination of interest rate increases, monetary tightening and orders from Beijing to local governments to cut out white-elephant investment projects.
Qu Hongbin, chief China economist for HSBC in Hong Kong, noted that factory output weakened even though retail sales picked up in October and export demand remained buoyant.
"This implies that growth in fixed-asset investment has been slowing, though we still need to wait for more data to assess the magnitude of the investment slowdown," he said in a note.
Economists at Goldman Sachs interpreted the report the same way. "Given the robust growth in exports and retail sales, the weakness was probably induced by softer fixed-asset investments," they told their clients.
October investment figures will be released tomorrow.