Weak China data adds pressure for stimulus

Business | Agencies 16 May 2019

China's industries, exports and retail sector showed lower than expected growth last month, adding pressure on Beijing to roll out more stimulus as the trade war with the United States escalates.

Retail sales rose 7.2 percent in April from a year earlier, the slowest pace since May 2003 for April,

The data suggested consumers were now beginning to cut back spending on everyday products from personal care to cosmetics, and continued to shun expensive items such as cars.

"Weak retail sales partially stemmed from a deterioration in employment and declining income of the middle-and-low income groups," said Nie Wen, an economist at Hwabao Trust.

Growth in industrial output slowed more than expected to 5.4 percent in April year-on-year, pulling back from a 4-1/2 year high of 8.5 percent in March, which some analysts had suspected was boosted by seasonal and temporary factors. Analysts polled had forecast output would grow 6.5 percent.

Exports meanwhile unexpectedly shrank in April in the face of US tariffs and weaker global demand, while new factory orders from at home and abroad remained sluggish.

Weighing on industrial output, motor vehicle production dropped nearly 16 percent. Earlier this week, industry data showed automobile sales in China fell 14.6 percent in April, the 10th consecutive month of decline.

The yuan traded lower with the offshore yuan hitting an intra-day low at 6.9177, just shy of its 2019 low at 6.9194 versus the US dollar. .

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