BCN-14 Winter cuts dent China’s industrial output

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BCN-14

CHINA-ECONOMY

Winter cuts dent China’s industrial output

BEIJING, Dec 14, 2017 (BSS/AFP) – China’s industrial output slowed again
in November, official data showed Thursday, as authorities press on with
their fight against smog by clamping down on polluting heavy industries.

Output at factories and workshops expanded 6.1 percent year-on-year, the
National Bureau of Statistics (NBS) said, against 6.2 percent in October and
in line with forecasts in a Bloomberg News survey.

In some northern cities, the government has forced steel factories and
smelters to cut production — with some running at half capacity — in a
drive to clean up the country’s notoriously heavy winter smog.

Other enterprises have faced cuts in their natural gas supply as China
lurches from supply issues after rapidly transitioning its population away
from coal-fired winter heating.

The drastic measures are working, with Greenpeace saying air quality in
Beijing last month was considerably better than any other November since
2013.

“The national economy has maintained the momentum of stable growth,” said
NBS spokesman Mao Shengyong.

“But we should also see that there are still many outside risks and
variations, which pose relatively big challenges to high-quality
development.”

His comments come at a time of uncertainty about the global trade outlook
with US President Donald Trump threatening to review numerous deals with
other countries and sometimes accusing China of killing American jobs.

Also Thursday, the People’s Bank of China increased the amount it charges
lenders, hours after the US Federal Reserve hiked interest rates. The PBoC
similarly raised its borrowing costs after the Fed in March in a bid to
prevent cash from flowing out of the country to chase better investment
returns.

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CHINA-ECONOMY 2 LAST BEIJING

During a Communist Party congress last month, President Xi Jinping told
delegates China will move to a new era of economic growth focused on quality
rather than high growth. To get there, the government is pushing to make
domestic demand the pillar of the world’s second largest economy.

November’s retail sales figures ticked in the right direction for that
goal.

NBS data showed growth increasing to 10.2 percent in November, up 0.2
percentage points from October, but short of Bloomberg forecasts of 10.3
percent.

Strong trade data last week showing sustained export growth indicates
China has some time for its large populace to start spending.

Fixed asset investment grew 7.2 percent year-on-year from January to
November, in line with expectations, but the fifth consecutive month the
reading has fallen.

“The upshot is that consumption and investment appear to have held up
reasonably well last month,” said Julian Evans-Pritchard of Capital
Economics.

This month’s figures follow a string of healthy indicators suggesting
China’s economy is stable even as the government beefs up its war on smog and
industrial overcapacity.

China’s gross domestic product is tipped to grow at a faster pace than the
government’s target this year.

BSS/AFP/HR/108