China’s May industrial output up 6.1 percent

BEIJING: Growth in China´s industrial production reached a three-month high in May, figures showed Thursday, while expansion in retail sales rebounded from a nine-year low in cautiously positive signs for the world´s second-largest economy.
Industrial output, which measures output at factories, workshops and mines, rose 6.1 percent year-on-year in May, the National Bureau of Statistics said in a statement.
Retail sales, a key indicator of consumer spending, increased 10.1 percent in the same month, the NBS said.
The industrial output figure was the highest since a reading of 6.8 percent in January-February, when the data was released for two months to iron out distortions related to Chinese New Year.
The May figure was also above the 5.9 percent recorded in April and marginally above the 6.0 percent in a median forecast in a poll of economists by Bloomberg News.
The retail sales result, meanwhile, matched the median forecast of 10.1 percent and was just above April´s 10.0 percent, a nine-year low.
“The data suggest that although activity remains subdued, recent policy support is now helping to stabilise growth,” Julian Evans-Pritchard, China economist at Capital Economics, said in a note reacting to the figures, referring to steps including central bank interest rate cuts.
The results came as China´s economy has continued to slow in 2015 after growing at its weakest pace — 7.4 percent — in nearly a quarter-century last year.
In the first three months of this year gross domestic product (GDP) expanded 7.0 percent, the worst quarterly result in six years.
China´s authorities are trying to engineer a controlled slowdown as they seek to transform the country´s growth model to one whereby consumer spending becomes the key driver as opposed to heavy infrastructure investment.
The NBS also said that fixed asset investment, a measure of government spending on infrastructure, expanded 11.4 percent year-on-year in the January-May period, the lowest since December 2000, according to previous figures.
Authorities, however, fear too fast a deceleration in economic growth and have carried out stimulatory measures including interest rate cuts to help ensure the slowdown does not get out of hand.
The central People´s Bank of China (PBoC) has cut benchmark interest rates three times since November and also implemented reductions in the amount of funds banks must keep on hand in a bid to pump up economic growth.
Economists are broadly expecting the PBoC will be forced to take further easing steps during the rest of this year.
NBS analyst Jiang Yuan said in a statement that the latest figures should not be interpreted too optimistically.
“Despite industrial output growth having picked up marginally over the past two months, domestic and external market demand for industrial products remained relatively weak, the basis for the recovery in industrial production was not consolidated and the downward pressure is still rather big,” Jiang said.