China's industrial production growth slowed sharply in August to its lowest level for more than five years at 6.9 per cent, official data showed today, intensifying concerns for the world's second-largest economy.
The key indicator, which measures output at factories, workshops and mines, slumped from a 9.0 per cent year-on-year expansion in July and was the worst since 5.7 per cent in December 2008, during the global financial crisis.
It also fell far short of the 8.7 per cent median increase in a survey of 15 economists by The Wall Street Journal.
The abrupt slowdown and other data released today are certain to compound growing worries over the strength of China's economy - a key driver of world commerce - following recent indicators suggesting growth is weakening even after authorities took limited stimulatory measures.
Retail sales, a key indicator of consumer spending, rose 11.9 per cent in the same month on-year, the National Bureau of Statistics (NBS) said - also down from 12.2 per cent in July.
Fixed asset investment, a measure of government spending on infrastructure, expanded 16.5 per cent on-year in the first eight months of 2014. The figure is only released as a cumulative change.
It was below the 17.0 per cent reading for the first seven months of the year, and also below the 16.9 per cent forecast.
China's Communist Party government is targeting expansion of about 7.5 per cent in gross domestic product (GDP) this year, the same as last year's objective, as it tries to steer the country's growth model towards consumer spending and away from the export- and investment-fuelled double-digit economic expansion regime of the past.
ANZ Bank economists Liu Li-Gang and Zhou Hao said that the August data put the government's scenario in danger and showed the need for prompt action.
"Past experience suggests that China needs to maintain around 9.0 per cent industrial production growth to deliver 7.5 per cent GDP growth," they wrote in an analysis.
"In our view, short of outright policy easing, China will likely miss the 7.5 per cent growth target this year, and a sharp economic slowdown will endanger the undergoing structural reforms," they added.
"Chinese authorities should further relax monetary policy as soon as possible to prevent the growth momentum from decelerating further."
How they will react, however, is unclear.
Premier Li Keqiang, addressing a World Economic Forum meeting in China on Wednesday, appeared far from concerned.
"When observing the Chinese economy, one should not just focus on its short-term performance or the performance of a particular sector," he said.
"Rather, one should look at the overall trend, the bigger picture and the total score.
