June 21, 2021

Chinese industrial production slows down and rises 5 tenths less in November

Chinese industrial production slows down and rises 5 tenths less in November



China's industrial production expanded 5.4% year-on-year in November, five tenths less than the figure reached a month earlier, the National Statistics Office (ONE) reported today.

These are data well below the forecasts of most analysts, who note that growth had gone from 5.8% to 5.9% in October and 5.4% in November is the worst data in 33 months.

And they correspond to a period of full commercial war between China and the United States, since it was not until the beginning of December when Donald Trump and Xi Jinping agreed during the G20 summit in Argentina to temporarily bury the ax of the commercial war that they have maintained for months. .

The figure is also lower than the figure accumulated in the first eleven months of the year, when industrial production increased by 6.3% year-on-year, 0.1 percentage points slower than in the period from January to October.

Industrial production, reminded the ONE, is used to measure the activity of large companies with an annual turnover of at least 20 million yuan (about 2.9 million dollars).

A breakdown of the data showed that the production and supply of electricity, thermal energy, gas and water registered the fastest growth, with a 9.8% year-on-year in November compared to 9.5% in October.

Meanwhile, manufacturing output increased 5.6% year-on-year, down 0.5 percentage points from October, and mining sector output increased 2.3% year-on-year, 1.5 percentage points less than in October.

ONE highlighted the "rapid expansion" of high-tech manufacturing production, which increased 11.8% year-on-year in November, and the manufacturing of equipment in strategic emerging industries, which rose 8.3%.

The figure for retail sales of consumer goods was also published today, which grew 8.1% year-on-year in November, five tenths less than the 8.6% growth observed in October.

This is the slowest growth since May 2003 of this indicator, which also registered a 10% drop year-on-year in the sale of automobiles.

In the accumulated from January to November, retail sales and total goods reached 9.1%.

The ONE also offered today the data on the investment of fixed assets of China, which grew by 5.9% in the first eleven months of the year, two tenths more than the increase of 5.7% in the January-October period.

In the opinion of the analysis firm Capital Economics, these data show "weakness" and a cooling of demand and investment that leave a "fragile" horizon in the long term.

"The data show an economy under pressure both externally and internally," says economist Julian Evans-Pritchard, adding that the Chinese government's policies to prop up growth "are falling short."

Looking ahead, according to the analyst, "even if China and the United States are able to reach a lasting trade agreement, the slowdown in global growth and the delayed impact of the slowdown in credit growth will be an obstacle to economic activity in the coming months. "

"We hope that this will lead to greater flexibility in economic policies, including cuts in reference credit rates," adds Evans-Pritchard.

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