China's output cools as it grows by 4.4%

China’s industrial output continued to cool, growing at a slower pace of 4.4 percent year on year in August, data from the National Bureau of Statistics showed on Monday.

The economy is continuing to operate within a reasonable range and steadily extending optimization of its industrial structure, said the bureau's Fu Linghui.

"It should be noted that global economic growth has slowed down since the beginning of this year, trade protectionism is on the rise, the international environment is becoming more unstable and uncertain, and there are also increasing downward pressures domestically," Fu said.

Value-added industrial production grew 4.4 percent in August from a year earlier, 0.4 percentage points lower than that recorded in July. It was the weakest pace since February 2002.

In the January-August period, major industrial enterprises posted added value increasing by 5.6 percent from the same period last year, 0.2 percentage points slower than the first seven months.

The mining industry saw a 3.3 percent year-on-year growth in value-added output last month, manufacturing rose 4.3 percent, and the electricity, heat, gas, water production and supply sectors advanced by 5.9 percent.

Output of the high-tech industry grew 6.1 percent, 1.7 percentage points faster than overall industrial output growth, indicating continuous optimization of the industrial structure, the bureau said.

The service sector expanded 6.4 percent in August from a year earlier, 0.1 percentage points faster than the previous month, while for the January-August period it grew 7 percent year on year to outpace the increase in the secondary industry by 1.4 percentage points, according to the bureau.

Among them, information transmission, software and information technology services grew by 16.9 percent and the leasing and business services industry rose 8.1 percent, which were respectively 10.5 percentage points and 1.7 percentage points faster than the overall service sector.

Headline retail sales growth in nominal terms eased slightly to a weaker-than-expected 7.5 percent year on year in August from 7.6 percent in July. Among them, retail sales of consumer goods excluding automobiles rose 9.3 percent, 0.5 percentage points higher than the previous month.

By major product in nominal terms, sales growth of oil and oil products edged down to post a 1.2 percent decline year on year in August from the 1.1 percent drop in July, weighed on by the significant fall in year-on-year oil price inflation (Brent oil price inflation fell 18.5 percent in August from the 13.7 percent decrease in July), according to Nomura.

However, retail sales in products related to consumer upgrade, the catering industry and online retail all extended rapid growth in August, Fu said.

Fixed asset investment growth in year-to-date terms moderated to 5.5 percent year on year in August from 5.7 percent in July. This implies its single-month growth fell to 4.3 percent year on year in August from 5.2 percent in the previous month.

"August’s drop in FAI growth was driven mainly by a fall in manufacturing investment growth, which turned negative in August, falling to negative 1.6 percent year on year from 4.7 percent in July, the lowest single-month year-on-year growth rate since the data series was first released in January 2004 and likely weighed on by weakening domestic demand, elevated US-China trade tensions and sluggish industrial profit growth," said Lu Ting, chief China economist at Nomura.

Infrastructure investment rebounded to grow 4.9 percent in August comparing with the 2.7 percent rise in July, "partly due to faster fiscal spending on infrastructure investment underpinned by strong local government special bond issuance in June-August," Lu said.

China’s foreign trade added up to 2.72 trillion yuan (US$385 billion), up 0.1 percent year on year. Export growth posted a 2.6 percent year-on-year growth in August, while imports retreated 2.6 percent, reversing the 0.4 percent rise in July. 

In the first eight months, 9.84 million new urban jobs were created, achieving 89.5 percent of the annual target for the year. The urban unemployment rate surveyed in 31 major cities was 5.2 percent in August, remaining flat from a month earlier.

"The next step is to push forward counter-cyclical regulation and intensify the "Six Stabilities" efforts (to stabilize employment, finance, foreign trade, foreign investment, investment and market expectations) in accordance with the plans of the Party Central Committee and the State Council," Fu said.