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China loses steam as October factory output growth slows

China's exports and import growth both eased in October, while the smog war dragged on manufacturing activity last month.

Reuters  |  Beijing 

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China's industrial output cooled last month, while fixed asset investment and retail sales grew slower than expected, suggesting the may be loosing some steam as the government cracks down on debt risks and pollution.
Industrial output rose 6.2 percent in October from a year earlier, missing analysts' estimates of a 6.3 percent gain and down from a 6.6 percent increase in September.

Fixed-asset investment growth slowed to 7.3 percent in the January-October period, the National Bureau of Statistics (NBS) said on Tuesday. Analysts had expected an increase of 7.4 percent.
China's has surprised financial markets with robust growth of nearly 6.9 percent in the first nine months of this year, underpinned by a recovery in its manufacturing and industrial sectors thanks to a government-led infrastructure spending spree, a resilient property market and unexpected strength in
That has supported the world as the Asian giant has continued to hoover up commodities and consumer goods, helping to stoke underlying global demand for cars and smartphones to TVs and industrial products.
But the world's second-largest has started to show signs of fatigue, with momentum seen slackening further as Beijing's crackdown on debt risks curbs demand and tighter pollution rules hits factory output.
China's and import growth both eased in October, while the smog war dragged on manufacturing activity last month.
To be sure, data has yet to point to any marked deceleration in economic growth, and analysts see only a modest loss of momentum over the next few months. Indeed, China's producer prices were surprisingly strong in October, despite muted activity during a week-long golden week holiday.
Growth of private investment slowed to 5.8 percent from 6 percent in January-September.
Retail sales gained 10 percent in October on-year, slower than the expected 10.4 percent rise. Retail sales growth has hovered in the 10 to 11 percent range for the last two years in a sign of resilient domestic demand.
Analysts had forecast they would rise 10.4 percent, slightly higher than the prior month.
Many analysts expect that even with some loss of momentum in the fourth quarter, China's economic growth will easily meet or beat the government's full-year target of around 6.5 percent.

First Published: Tue, November 14 2017. 08:21 IST