BEIJING听–听China‘s industrial听辞耻迟辫耻迟听and听谤别迟补颈濒听蝉补濒别蝉听grew at a faster-than-expected pace in August, but property investment slumped further and could drag on broader demand even as the recent flurry of support policies showed signs of stabilizing the economy.
Industrial听辞耻迟辫耻迟, released on Friday by the National Bureau of Statistics (NBS), rose 4.5% in August from a year earlier, accelerating from the 3.7% pace seen in July and came above expectations for a 3.9% increase in a Reuters poll of analysts. The growth marked the quickest pace since April.
搁别迟补颈濒听sales, a gauge of consumption, also increased at a faster 4.6% pace in August aided by the summer travel season, and was the quickest growth since May. That compared with a 2.5% increase in July, and an expected 3% increase.
The up产别补迟听data suggest that a flurry of recent measures including聽聽to shore up a faltering economic听谤别肠辞惫别谤测听are starting to bear fruit.
Reacting to the data, the Chinese yuan聽CNY=CFXS聽touched two-week high against dollar.
Yet, the听谤别肠辞惫别谤测听is far from sure-footed, analysts say.
“Despite signs of stabilization in manufacturing and related investment, the deteriorating property investment will continue to pressure economic growth,” said Gary Ng, Natixis Asia Pacific senior economist.
Friday’s data followed better-than-expected聽, narrowing in the declines of聽聽as well as聽.
The country’s聽聽also returned to growth in August from a year earlier, as deeper discounts and tax breaks for environmentally friendly and electric vehicles听产辞辞蝉迟ed consumer sentiment.
To sustain the听谤别肠辞惫别谤测听momentum,听颁丑颈苍补‘s central bank said on Thursday it would聽聽the amount of cash that banks must hold as reserves for the second time this year to听产辞辞蝉迟聽liquidity. Earlier in the day, the bank also聽聽maturing medium-term policy loans to inject more liquidity into the finiancial system, while keeping the interest rate unchanged.
But analysts say more fiscal and monetary policy steps are needed as an ailing property sector, high youth unemployment, uncertainty around household consumption and rising Sino-US tensions over trade, technology and geopolitics have raised the bar for a durable economic听谤别肠辞惫别谤测听in the near future.
Ng said confidence remains the root of most problems requiring larger “constructive policy and regulatory changes” to听产辞辞蝉迟聽growth momentum.
The once mighty聽聽still remains a drag on the $18 trillion economy, with the country’s largest private developer聽聽the latest to stumble due to liquidity squeeze.
For August, property investment extended its fall, down 19.1% year-on-year from a 17.8% slump the previous month, according to Reuters calculations based on NBS data.
Moody’s on Thursday cut听颁丑颈苍补‘s crisis-hit property sector’s outlook to聽聽from stable, expecting contracted聽蝉补濒别蝉听to fall by about 5% over the next six to 12 months.
Fixed asset investment expanded 3.2% in the first eight months of 2023 from the same period a year earlier, versus expectations for a 3.3% rise. It grew 3.4% in the first seven months.
An uncertain business climate meant companies remained wary about hiring, but the nationwide survey-based jobless rate improved a touch to 5.2% in August, slightly down from 5.3% in July. – Reuters
