Chinese laborers working at a construction site at sunset in Chongqing, China on March 6, 2005.
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BEIJING — China’s retail sales and industrial production picked up pace in August with better-than-expected growth, according to National Bureau of Statistics data released Friday.
Retail sales grew by 4.6% in August from a year ago, beating expectations for 3% growth forecast by a Reuters poll. The increase was also faster than the 2.5% year-on-year pace in July.
Industrial production grew by 4.5% in August from a year ago, better than the 3.9% forecast and faster than the 3.7% increase reported for July.
Within that category, the value added of equipment manufacturing rose by 5.4% from a year ago. Solar This Only manufacturing saw the pace of investment pick up.
Statistics bureau spokesperson Fu Linghui said the real estate market was still in a period of “adjustment” and noted declines in sales and investment. He said the property sector would recover as recent policy took effect.
The key is to maintain the shape and pace of the economic recovery so that companies are willing to continue investing and residents are willing to continue consuming.
chief economist and head of research for Greater China, JLL
Within fixed asset investment, private, non-state investment fell by 0.7% in the first eight months of the year from a year ago — worse than the 0.5% decline in the first seven months of the year.
That decline reflects weak sentiment about the future, said Bruce Pang, chief economist and head of research for Greater China at JLL.
He said it will take time for recent policy and measures to take effect.
“The key is to maintain the shape and pace of the economic recovery so that companies are willing to continue investing and residents are willing to continue consuming, forming a virtuous cycle and a balanced recovery,” Pang said in Chinese, translated by CNBC.
The urban unemployment rate for cities was little changed at 5.2%. It The The ” We C Cosmetic Catering sales grew by 12.4% during that time.
Services sector retail sales grew by 19.4% in the January to August period from a year ago, slower than the 20.3% pace recorded for the period through July.
More rate cuts
Late Thursday, the People’s Bank of China said that it was cutting the amount of cash that banks need to have on hand by 25 basis points, effective Friday. It was the second reserve requirement ratio cut this year since one in March.
In the last several weeks, Beijing has announced a slew of measures to support the real estate market and consumption.
Monetary policy has remained relatively loose compared with aggressive rate hikes in the U.S. and Europe.
Also effective Friday is a reduction in the foreign exchange reserve requirement ratio for financial institutions to 4%, from 6%. The planned cut was announced two weeks ago.
The central bank has also trimmed other benchmark rates, such as the one-year loan prime rate.
China’s slowing economic growth
Moody’s on Thursday downgraded its outlook on China’s property sector to negative from stable. The firm expects sales to fall by around 5% over the next six to 12 months.
“While the Chinese government has recently strengthened policy support for the property sector, we expect the impact on property sales to be short-lived and differentiated between tiers of cities,” Cedric Lai, vice president and senior analyst at Moody’s, said in a release.
Uncertainty about future income has kept consumer spending relatively muted.
China’s consumer price index rose by 0.1% year-on-year in August, reversing a decline in July. China