China’s industrial output growth lowest in over 17 years
The industrial output data reflects an escalation of US-China trade tensions.
According to data released by the National Bureau of Statistics of China, in May this year, the added value of China's above-scale industries increased by 5% year-on-year, the lowest level since February 2002, down from 5.4% in the previous month. The May data is also significantly lower than the 5.5% forecast by economists surveyed by Reuters.
In May, some aspects of the Chinese economy did show some vitality. In May, China’s total retail sales growth rebounded strongly, from 7.2% in April to 8.6%. April was the worst month since 2003. Economists surveyed by Reuters expect total retail sales to increase by only 8.1% in May.
The industrial output data reflects an escalation of US-China trade tensions. In mid-May, US President Donald Trump raised the tariff on $200 billion in Chinese exports to the United States to 25%. Retaliation by Beijing has imposed tariffs on about $60 billion of US exports to China.
Although the Chinese economy grew faster than expected in the first quarter of this year compared to the last three months of 2018, analysts said that a large part of this was due to stimulus measures and ease of credit flows. Recent data points, including credit growth, were worse than expected.
In recent weeks, Beijing has strengthened its support measures to support economic development, such as encouraging local governments to use special bonds in major projects.