By tina qiao, ellen zhang and ryan woo
BEIJING — China’s factory output slowed in April but showed surprising resilience, a sign that government support measures may have cushioned the impact of a trade war with the US that threatens to derail momentum in the world’s second-largest economy.
Industrial output grew 6.1 percent from a year earlier, National Bureau of Statistics (NBS) data showed on Monday, slowing from 7.7 percent in March but beat a forecast 5.5 percent rise in a Reuters poll.
“April’s resilience is in part a result of ‘frontloaded’ fiscal support,” said Tianchen Xu, senior economist at the Economist Intelligence Unit, referring to stronger government spending.
The data followed firmer-than-expected exports earlier this month that economists said were supported by exporters rerouting shipments and countries buying more materials from China amid a re-ordering of global trade due to US President Donald Trump’s tariffs.
However, Monday’s data underscored the shock from US reciprocal tariffs, Xu said, adding “despite the rapid growth in industrial value-added, the export delivery value was nearly stagnant.”
Surprise agreement
Beijing and Washington reached a surprise agreement last week to roll back most tariffs imposed on each other’s goods since early April. The 90-day pause has put the brakes on a trade war that has disrupted global supply chains and stoked recession fears.
“China’s foreign trade has overcome difficulties and maintained steady growth, demonstrating strong resilience and international competitiveness,” Fu Linghui, statistics bureau spokesperson, told a press conference on Monday. He added that the trade de-escalation would benefit bilateral trade growth and global economic recovery.
But economists have warned that the short-term truce and US President Donald Trump’s unpredictable approach will continue to cast a shadow over China’s export-driven economy, which still faces 30 percent tariffs on top of existing duties.
By midday, China’s blue-chip CSI300 Index dropped 0.4 percent and the Shanghai Composite Index lost 0.1 percent. The yuan currency also slipped against the dollar.
Pressures remain
The property sector has yet to show signs of recovery, with home prices stagnating and investment in the sector shrinking.
Retail sales, a measure of consumption, rose 5.1 percent in April, down from a 5.9 percent increase in March, and missed forecasts for a 5.5 percent expansion. Economists attributed the slowdown to the impact of US tariffs on consumer expectations and tepid demand at home.
Commodity sectors also showed signs of weakness with the country’s daily crude oil processing rate down 4.9 percent in April from March, while crude steel output slid 7 percent month-on-month.
Meanwhile, the government’s push to boost household spending via a trade-in scheme for consumer goods led to a 38.8 percent gain in home appliance sales.
