China industrial output expands 6.3 pct for Jan.-Feb

  • China industrial output expands 6.3 pct for Jan.-Feb

China industrial output expands 6.3 pct for Jan.-Feb

China's services sector expanded 8.2% in January-February from a year earlier, the statistics bureau said on Tuesday, unveiling a new growth indicator amid the country's transition from an industrial to services-led economy.

Real estate investment increased by 8.9 percent in the period, up from 3.0 percent in the first two months of a year ago.

Sheng said consumption stayed flat in China, stressing the decline in growth is mainly due to a slowdown in auto sales after the government rolled back tax breaks on small cars. The category's 8.3 percent growth in the fourth quarter helped offset slower expansions in manufacturing and agriculture and contributed to the world's second-largest economy posting its first acceleration in two years.

Between January and February, the area of new properties sold in non-core Chinese cities jumped 35.9 percent year on year, up 14 percentage points from 2016.

Analysts had expected fixed-asset investment growth of 8.2 percent, quickening from 8.1 percent in the whole of 2016.

"If you want to look at changes in China's growth drivers and economic trends, before you would look at the industrial sector".

The pace of service growth in early 2017 is basically the same as at the start of previous year, the National Bureau of Statistics (NBS) said.

The statistics bureau says compilation of the new gauge is "a process of exploration and continuous improvement" as technically it's hard to gather, Sheng said. "We expect a result only slightly higher this year as policymakers are keen not to recreate the same demand conditions that saw overcapacity in China's industrial sectors flourish".

China's economy began 2017 on solid footing, as private sector investment accelerated alongside stronger industrial output. The rise, however, accelerated from the 22.4 percent gain recorded a year ago, according to the bureau's data.

"Property sales and real estate investment grew sharply in the last two months, tantalising the market with hope that property construction could lift again", he says.

While Dhar suggests the demand picture will be mixed, he believes that commodity prices are likely to be driven more by supply factors, rather than demand, this year, seemingly a continuation of the pattern in 2016 when government policy to reduce overcapacity and supply disruptions both within China and overseas saw prices for coking coal, iron ore, thermal coal and steel, among others, soar.