BEIJING- China’s factory output and retail sales grew at a faster pace in August, but tumbling investment in the crisis-hit property sector threatens to undercut a flurry of support steps that are showing signs of stabilizing parts of the wobbly economy.
Chinese policymakers face a daunting task in trying to revive growth after a brief post-COVID bounce in the wake of persistent weakness in the crucial property industry, a faltering currency and weak global demand for its manufactured goods.
Industrial output rose 4.5 percent in August from a year earlier, data released on Friday by the National Bureau of Statistics (NBS) showed, accelerating from the 3.7 percent pace in July and beating expectations for a 3.9 percent increase in a Reuters poll of analysts. The growth marked the quickest pace since April.
Retail sales, a gauge of consumption, also increased at a faster 4.6 percent pace in August aided by the summer travel season, and was the quickest growth since May. That compared with a 2.5 percent increase in July, and an expected 3 percent rise.
The upbeat data suggest that a spate of recent measures to shore up the economy are starting to bear fruit, prompting JP Morgan to raise its forecast of China’s 2023 gross domestic product growth to 5 percent from prior 4.8 percent .
ANZ also upgraded its growth forecast for the world’s second largest economy by 0.2 percentage points to 5.1 percent .
Yet, a durable recovery is far from assured, analysts say, especially as confidence remains low in the embattled property sector and continues to be a major drag on growth.
“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. – Reuters
