China industrial output grows disappointing 9.6%

China's industrial output grew at a slower-than-expected 9.6 percent year-on-year in May, a faster clip than the previous month but still near three-year-lows, according to the government.

While production from the country's millions of factories and workshops was stronger than the 9.3 percent expansion seen in April, it was still lower than forecasts of a 9.9 percent gain in a Dow Jones Newswires poll of 14 economists.

"The turning point hasn't come yet. Economic growth is still declining," Citigroup economist Shuang Ding told Dow Jones Newswires.

The disappointing figures came as Beijing seeks to boost economic growth to avoid a hard landing in the world's second largest economy, with other data showing falling infrastructure investment and a slowdown in consumer spending.

However, inflation figures released earlier in the day showed growth in consumer prices eased to 3.0 percent in May, the lowest level since June 2010, giving the government further room to loosen credit to boost flagging growth.

China has set itself a target of keeping annual inflation within four percent this year, fearing that surging prices carry the potential to cause social unrest as people grumble about paying more.

But easing inflation should give the government more room to ease monetary policy to stimulate growth.

China's economy grew 8.1 percent in the first quarter of 2012 year-on-year, its slowest pace in nearly three years.

Hoping to spur growth, Beijing slashed interest rates by 25 basis points on Thursday -- its first cut in more than three years -- and moved to allow rates to float more freely.

Analysts said the moves sent a strong message that China is willing to ease monetary policy to shore up expansion in the Asian powerhouse, which has played a key role in supporting the global economy in the current downturn.

China has also cut bank reserve requirements three times since December as policymakers aim to boost lending to help growth.

Alistair Thornton, Beijing-based China economist for IHS Global Insight, told AFP that further stimulus was likely in the coming months.

"Growth in China is slowing rapidly, as price pressures continue to come off. That should act as a spur for government policy to combat the slowdown," he said.

"We think it is very likely that there will be another interest cut through the rest of the year," while there was "clearly a lot more room" for cuts in bank reserve ratio requirements.

Food prices were up 6.4 percent from a year earlier in May, compared with April's 7.0 percent rise, while non-food prices rose 1.4 percent from a year earlier, compared with April's 1.8 percent increase.

The producer price index (PPI), which measures the cost of goods at the farm and factory gate and is an indicator of future consumer prices, slipped 1.4 percent in May year-on-year, a sharper fall than April's 0.7 percent slide.

Meanwhile, the government said urban fixed asset investments rose 20.1 percent in the first five months of 2012 on-year, weakening from 20.2 percent in the first four months and 20.9 percent in the first three.

Fixed asset investments in the cities are a key gauge of the Chinese government's infrastructure spending, which has increased rapidly in recent years as Beijing has sought to cushion the impact of the global downturn.

And retail sales rose 13.8 percent in May compared with the same period a year earlier. They rose 14.1 percent in April on-year and 15.2 percent In March.

Retail sales are the main gauge of consumer spending in the world's second-largest economy and serve as an indicator of the government's progress in making domestic consumption account for a bigger share of growth.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Billionaire finds wreck of WWII ship in Phl
    Billionaire finds wreck of WWII ship in Phl

    Microsoft co-founder Paul Allen says he has found the Japanese Navy’s biggest warship at the bottom of the sea in the Philippines, 70 years after US forces sank it. Allen posted a photo on Twitter on Tuesday of the World War II battleship Musashi’s rusty bow, which bore the Japanese empire’s Chrysanthemum seal. The American billionaire, who has also pursued space exploration, said his luxury yacht and exploration ship, the M/Y Octopus, found the Musashi one kilometer (1.6 miles) deep on the …

  • US ambassador recovers from knife attack praised by N. Korea
    US ambassador recovers from knife attack praised by N. Korea

    The US ambassador to South Korea, Mark Lippert, was recovering from surgery Thursday after having his face and arm slashed by a knife-wielding activist in an attack applauded by North Korean state media. The United States condemned the "act of violence" which saw the ambassador rushed to hospital where his condition was described as stable after two-and-a-half hours of surgery that included 80 stitches to a deep gash on his right cheek. During the assault, Kim screamed a slogan in favour of …

  • Miriam bucks house arrest for Enrile
    Miriam bucks house arrest for Enrile

    Sen. Miriam Defensor-Santiago believes granting Senate Minority Leader Juan Ponce Enrile house arrest, while former President Gloria Macapagal-Arroyo remains under hospital detention, will violate the equal protection clause of the Constitution. “That’s already a violation of the equal protection of the law,” she said. …

  • New Moro rebel group emerges
    New Moro rebel group emerges

    A radical Muslim cleric trained in the Middle East and considered one of the leaders of the Bangsamoro Islamic Freedom Fighters (BIFF) has broken away from the terror group to form his own band of jihadists who are now reportedly providing sanctuary to bomb expert Basit Usman and at least five foreign militants, the military said yesterday. Armed Forces of the Philippines (AFP) spokesman Col. Restituto Padilla, citing reports from the field, said the Justice for Islamic Movement (JIM) was …

  • 8 of 10 cities most at risk from natural disasters located in Phl – study
    8 of 10 cities most at risk from natural disasters located in Phl – study

    Eight of 10 world cities most exposed to natural hazards are in the Philippines and more than half of the 100 cities most exposed to earthquakes, storms and other disasters are in four Asian nations, according to a research. The study, published on Wednesday by risk analysis firm Verisk Maplecroft, analyzed the threat posed by storms, floods, earthquakes, tsunamis, fires, volcanoes and landslides in more than 1,300 cities. The study found that the 10 cities most at risk are Port Vila in …

  • World's oldest person wonders about secret to longevity too
    World's oldest person wonders about secret to longevity too

    TOKYO (AP) — The world's oldest person says 117 years doesn't seem like such a long time. …

  • Ohio mom, boyfriend guilty; child emailed teacher for help

    PORTSMOUTH, Ohio (AP) — A woman and her boyfriend pleaded guilty to raping her young children and were sentenced to prison on Wednesday, a year after one of her daughters emailed a teacher for help and said she and her siblings were being chained to their beds, deprived of food and sexually assaulted. …

  • Ex-crew recognizes photos of sunken Japanese battleship
    Ex-crew recognizes photos of sunken Japanese battleship

    TOKYO (AP) — A former crewmember on a Japanese battleship that sank during World War II said Thursday he recognized photos of wreckage discovered this week off the Philippines by a team led by Microsoft co-founder Paul Allen. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options