In some negative news for the Chinese economy, it was reported today that industrial production in China hit a seven month low in October while spending on infrastructure slowed. The data added to expectations that the People’s Bank of China would be forced to increase the level of stimulus to shore up growth in the world’s second largest economy. According to a report released by the National Bureau of Statistics, it showed that factory output grew at an annual rate of 5.6 percent during the month of October, the weakest in seven months and is being seen as a huge negative by traders and investors on the street.
It was also reported that China’s urban fixed asset investment fell last month. According to a report released by the National Bureau of Statistics of China showed that Chinese Fixed Asset Investment fell to a seasonally adjusted 10.2 percent from 10.3 percent in the preceding month. Analysts on the street had expected Chinese Fixed Asset Investment to fall to 10.2 percent last month. Fixed asset investment is a closely watched gauge by traders and investors as it provides an insight into business growth in the Chinese economy. It is imperative to state that many analyst believe that the slowdown in the economy is self-imposed as the country tries to move away from focussing on export-led investment growth towards a consumption based economy.
The only positive was the retail sales numbers which came in above expectations. It was reported that retail sales which is a key gauge of consumer spending rose by 11 percent, its highest level in the year. Analysts on the street had expected the retail sales growth to come in at 10.9 percent during the month. Household spending on mobile phones, building supplies and other household products increased during the month.