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BEIJING (MNI) - China's economy grew 6.6% y/y in 2018, the slowest pace
since 1990, while GDP expanding 6.4% in the fourth quarter, the slowest in a
decade, according to data released on Monday by the National Bureau of
One brighter spot is industrial output rose 5.7% y/y in December, bouncing
back from 10-year low of 5.4% in November, and beating the 5.4% forecast by
economists polled by MNI. The gain was still the second-lowest this year. For
the whole year, industrial production grew at 6.2%, down from 6.6% in 2017.
Auto production declined 4.1% y/y in December, worse than November's -3.2%.
Among the biggest risk is the impact of the trade war with the U.S.
Producers of electronic parts and goods may face decreasing orders as more
countries may stop using China-made electronic components if the ongoing trade
talks failed to resolve disputes over intellectual property and the transfer of
technology. The gain of electronic equipment manufacturing output slowed to
10.5% y/y from November's 12.3%.
Industrial production could be further dampened by sluggish domestic and
foreign demand. December's factory-gate prices recorded the slowest pace in more
than two years at 0.9% y/y.
FAI grew 5.9% y/y in 2018, meeting the 5.9% median forecast in an MNI
survey, and maintained the same pace as Jan-Nov. This compared with a 7.2% gain
Infrastructure investment increased 3.8% y/y, accelerating from 3.7% in
Jan-Nov, indicating that the government has pushed hard to pump up investments
into building projects. Manufacturing investment grew 9.5% y/y in 2018,
unchanged from Jan-Nov.
Ning Jizhe, the director of the NBS, said the government can be expected to
set out stronger investment targets to help the country bridge gaps in regional
and urban-rural development, as well as catching up with standards in developed
On the contrast, property investment gained 9.5% y/y, decelerating from the
9.7% in Jan-Dec. Developers are more enthusiastic on new housing projects, given
that new construction areas increased by 0.4 percentage point from Jan-Nov.
However, sales areas decreased by 0.1 percentage point from the previous period
suggesting buyers are less bullish.
Judging from the slowing land transaction in recent months, property
investment could fall further ahead.
Retail sales improved to 8.2% y/y in December from a historical low 8.1% in
November, beating the median of 8.1% forecast in an MNI survey. In 2018, the
growth stood at 9.0%, compared with 2017's 10.2%.
Recent data have pointed to a rapid and overall spending slowdown. Concerns
over the country's outlook have led consumers to curtail purchases, which may
reflect the pressure on employment and household income growth, according to a
Consumers tend to spend less on luxury goods such as cars. Car sales
continued to decline, falling 8.5% y/y in December, compared with -10% in
In addition, consumers exhibited lower appetite for some of the daily goods
considered "consumption upgrade", such as bottled water, meat products and juice
drinks, CICC said.
The NBS director Ning said that service consumptions such as tourism,
culture and health care are not included in this indicator. Ning remained
optimistic that Chinese people are spending more on services, as well as
high-quality but expensive products, instead of basic amenities.
--FIFTEEN MILLION NEWBORN
Ning also countered concerns that China's population is plateauing and may
hinder growth, pointing out 15.23 million of new born babies last year and
nearly 900-million-strong labor force.
The country still enjoys the "population dividends" expected to drive
consumption and provide sufficient labor for the economy, according to Ning.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: firstname.lastname@example.org
--MNI Beijing Bureau; +86 10 8532 5998; email: email@example.com