- China’s industrial sectors strengthened dramatically in early 2018, according to data released by the Chinese government.
- Industrial output grew at the fastest annual pace in over six months, while property investment soared.
- China is targeting annual GDP growth of around 6.5% in 2018.
China’s economy shot the lights out in early 2018 with industrial output, fixed asset investment and retail sales all accelerating from the levels reported in December.
According to China’s National Bureau of Statistics, industrial output grew by 7.2% between January and February compared to the same period a year earlier, breezing past economists forecasts for a smaller increase of 6.1%.
It was the fastest year-on-year rate reported since June 2017, driven by stronger growth in steel, cement, coal and natural gas output from the levels reported in December.
Urban fixed asset investment also surprised to the upside, lifting 7.9% in the first two month of the year compared a year ago, above the 7% growth expected.
Investment in the private sector grew by 8.1% over the year, well above the 6% increase reported in calendar year 2017.
This measures investment on fixed assets such as buildings, plant, equipment and machinery in urban areas.
According to Reuters, real estate investment jumped by 9.9% from a year earlier, up from 7% in 2017. It was the fastest increase since 2015. Sales volumes by square metres, in comparison, decelerated to 4.1% from 3% in the year to December.
Floor space under construction and newly started both decelerated from the levels reported in December, increasing an year-on-year pace of 1.5% and 2.9% respectively.
Retail sales also accelerated, increasing at an year-on-year rate of 9.7%, above the 9.4% level reported in December.
Despite the pickup, it was marginally below the 9.8% increase expected by markets.
From a year earlier, sales of cosmetics, home appliances, jewellery, telecommunications products, autos and building materials all accelerated from the levels reported in December, offsetting weaker sales of garments, office supplies and furniture.
Earlier this month, the Chinese government set a GDP growth goal for 2018 of around 6.5%. On current form, today’s data suggests its already well on the way to achieving this task.
Financial markets have responded positively to the reports, although the reaction has been muted given ongoing concern about a potential trade war developing between the US and other major trade nations, including China.