Economy

China industrial output drops again in August

China industrial output drops again in August”

Real estate investment rose 7.9 percent year on year in January-August, unchanged from the growth in the first seven months, according to the National Bureau of Statistics (NBS).

Fixed-asset investment, a key growth driver for the world's second-largest economy, grew 7.8 percent in the first eight months of the year, the weakest pace since December 1999 and cooling from 8.3 percent in January-July.

Investment for residential properties went up 10.1 percent year on year, accounting for 68.3 percent of investment in the sector.

Strong sales growth at the start of the year could offset a projected slowdown for the rest of the year due to property-buying curbs in China's big cities, analysts say.

Analysts had expected growth of 8.2 percent.

Of 70 cities surveyed in July, the pace of new home price growth slowed in 15 major cities compared with the same month a year ago.

Still, economists at Nomura maintained their view that the economy would expand 6.8 per cent in the third quarter from a year earlier, easing only slightly from 6.9 per cent in the first half.

The main culprit for weak activity and spending was a slowdown in infrastructure investment, which also weighed on industrial output, Julian Evans-Pritchard, an economist at Capital Economics, said. Analysts had expected a slight pick-up in demand.

Earlier data for August had shown the country's producer price inflation accelerated to a four-month high in August, while consumer inflation quickened to a seven-month high.

Last week, the state assets regulator of central China's Hubei province told companies that have received investment from the provincial government to be cautious about new investments in the property sector and to control risks, state news agency Xinhua reported. But some analysts said higher prices may also be skewing the data and exaggerating the strength of its economic recovery.

In the first eight months, China's total property sales by floor area rose 12.7 percent from a year earlier to 985 million square metres, roughly equal to about 10.9 million homes.



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