No Chinese hope to grow 6%
According to the CER (China Economic Report) numbers from August showed China’s slowdown is deepening just as risks for the global economy mount, piling pressure on the authorities to do more to support growth, reported Bloomberg.
Industrial output rose 4.4% from a year earlier in August, the lowest for a single month since 2002, while retail sales came in below expectations. Fixed-asset investment slowed to 5.5% in the first eight months, with the private sector lagging state investment for the 6th month.
The slowdown in output was almost across the board, with food processing and general equipment manufacturing unchanged from last year. Car output rose after declining for four months. Growth in sales of consumer goods slowed to 7.2%, the lowest since April this year, but there was an increase in food sales. The unemployment rate fell to 5.2% from 5.3% in July, within the narrow band it has occupied all year even amid the slowdown.
Nomura International Ltd. said this all raises the likelihood that the People’s Bank of China will cut its medium-term lending rate. On the other hand, Chinese groups shed $40 billion in global assets. Chinese companies have become net sellers of global assets this year for the first time since corporations from the country became big players in international mergers and acquisitions a decade ago, CER cites media.
Chinese companies have agreed to sell about $40 billion in overseas assets so far this year, up from $32 billion for the whole of last year, according to data from Dealogic. At the same time, Chinese groups have bought just $35 billion of overseas assets this year, making the country a global net seller.
Divestments in the US, where Chinese corporate buyers are now viewed with increased scrutiny, have soared to over $26 billion this year, up from just $8 billion for all of 2018. The data from Dealogic goes back to 2015, when Chinese companies bought about $100 billion in overseas assets but sold only $10 billion.
Chinese Premier Li Keqiang said it is very difficult for China’s economy to grow at a rate of 6% or more because of the high base from which it was starting and the complicated international backdrop, cites media agency, the world’s No.2 economy faced certain downward pressure due to slowing global growth as well as the rise of protectionism and unilateralism, Li said in an interview with Russian media which was published on the Chinese government’s website.
China’s gross domestic product (GDP) grew 6.3% in the first half of the year, and Li said the economy was generally stable in the first eight months of the year.
