Chinese fixed asset investment and industrial production cool further
The latest spate of data out from China's statistics bureau on Saturday came in below economists' forecasts and may add to worries in some corners regarding the prospects for China's economic growth in the very near term.
Fixed asset investment in the year to the end of August expanded at a 16.5% clip, coming in well below the 16.9% pace projected by analysts, while industrial production only grew by 6.9%, comfortably below the 8.8% which had been estimated by the consensus.
Retail sales were higher by 11.9%, slightly below the 12.1% which had been expected.
Analysts divided
"The data released this weekend suggests that the renewed slowdown in China could be more severe than expected and there is increasing risk that the Chinese government will miss its 7.5% growth target for 2014, " commented analysts at Danske Bank Markets.
Amongst the factors which may be contributing to the decreased rates of expansion according to the above analysts are slower credit growth (particulary in some sources of shadow finance) and a possible negative impact from authorities' anti-corruption campaign, while the effects of the mini- fiscal stimulus undertaken in spring are starting to wane.
Nevertheless, the above 'hard data' may be exaggerating the decrease seen in economic activity, Danske Bank points out. In any case, further easing is possible if the manufacturing sector purchasing managers' indices (PMI) confirm the brake on economic activity and fall below the 48 point level over the coming months.
Economists at Capital Economics, on the other hand, think that so long as the labour market remains healthy "significant policy loosening" is unlikely, as Beijing is aware of the hazards of worsening the country's structural problems which such measures might entail.