China’s factory output jumps as Beijing bets on industry to drive recovery

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China’s industrial production rose more than expected last month, but retail sales grew more slowly in a sign that weak consumer sentiment was weighing on a recovery in the world’s second-largest economy.

Industrial production grew 6.7 per cent per cent year on year in April, official data from the National Bureau of Statistics showed on Friday, beating a forecast of 5.5 per cent from economists polled by Bloomberg and 4.5 per cent growth in March.

However, retail sales grew only 2.3 per cent from a year earlier, compared with an analyst forecast of 3.7 per cent and 3.1 per cent growth in March, signalling that authorities would need to step up efforts to stimulate domestic consumption.

China’s economy has shown mixed signs of a recovery in recent months, with exports returning to growth in April but domestic sentiment struggling under a deep slump in the property sector.

The People’s Bank of China plans to begin selling Rmb1tn ($140bn) of ultra-long bonds on Friday, the government said, in a bid to “give full play to the crucial role of government investment in shoring up economic growth”.

China’s cabinet, the State Council, also announced it would hold a meeting on Friday afternoon to address problems in the housing sector, which has continued to suffer a yearlong slowdown despite numerous initiatives to shore up debt-stricken property developers.

In other data, the NBS said fixed-asset investment grew 4.2 per cent year on year in April, trailing a Bloomberg analysts’ poll forecast of 4.6 per cent growth and a 4.5 per cent increase in March. Property prices in so-called first-tier cities fell by 2.5 per cent year on year.

China’s benchmark CSI 300 stock index edged down 0.3 per cent while the Hang Seng Mainland Properties index, a basket of Hong Kong-listed developers, shed 0.4 per cent after rising as much as 3.1 per cent in early trading.