China’s retail-sales growth, industrial output and investment slowed down below analysts’ expectations in January and February, indicating a sluggish economy that will make it harder to attain the government’s expansion target for 2014.
Factory output grew 8.6 percent over the two months from a year ago, according to the Beijing-based National Bureau of Statistics. This is its lowest level since 2009. Retail sales jumped 11.8 percent, the weakest start to the year since 2004; while fixed asset investment grew 17.9 percent, a 13-year low.
Stocks in Hong Kong plunged, while copper rose further after the data was released, two hours after Chinese Premier Li Keqiang said he remained confident that the country will meet its flexible growth estimate of around 7.5 percent.
“Since we say the GDP growth target is about 7.5 percent, ‘about’ means it has a certain degree of flexibility,” said Li in a press briefing in Beijing, in a reference to the gross domestic product. “A bit higher or a bit lower, we have a level of tolerance here.”
The economic slowdown will show whether China’s Communist Party is committed to giving more space to market forces, while simultaneously keeping debt, pollution and overcapacity under control.
Hong Kong stock market’s Hang Seng Index declined 0.7 percent as of 3.16 p.m. local time after rising to a high of 0.6 percent early in the day. Shanghai Composite Index, which whittled gains after the report, was 1.1 percent higher at the close of the market.
China merges figures for retail sales, fixed asset investment and industrial production for the first two months of the year, pointing out the fluctuations caused by the 1-week Lunar New Year holiday, which is held at different times each year.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org