China’s Economic system Was Shedding Steam Even Forward of Trump’s New Tariffs By Bloomberg

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© Bloomberg. A technician adjusts an industrial robot manufactured by the E-Deodar Robot Equipment Co., a wholly-owned subsidiary of Ningbo Techmation Co., as it stands on the production line of Guangdong Shiyi Furniture Co. in Foshan, China, on Tuesday, Feb. 28, 2017. Photographer: Qilai Shen/Bloomberg

(Bloomberg) — China’s economy lost steam in April after a rebound in March, even before President Donald Trump’s latest tariff increase arrived to further darken the outlook.

  • Industrial output rose 5.4% from a year earlier, versus a median estimate of 6.5%. Retail sales growth slowed to 7.2%, compared to the 8.6% projection. Fixed-asset investment slowed to 6.1% in the first four months, versus a forecast 6.4%.

Key Insights

  • State investment accelerated throughout the first four months, while private investment growth continued to slow
    • Manufacturing investment slowed, rising 2.5% in the first four months
    • Property investment in the first four months quickened by 2.4 percentage points to 11.9% compared with last year
  • “We believe the State Council will launch more measures to shore up the market sentiment,” said Raymond Yeung, chief China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “More tax cuts and consumer subsidies are in the pipeline.”
  • Instead of paring back stimulus as the April Politburo meeting suggested, policy makers may again step on the gas as the nation’s 2020 growth goal is threatened

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  • The survey-based unemployment stood at 5%, versus 5.2% the previous month

(Updates with chart, comment from ANZ and investment data.)

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