Chinese industrial output and urban fixed asset investment both undershot expectations in April, continuing the trend that has seen fears over the Chinese economy flare in recent weeks.
According to China’s National Bureau of Statistics (NBS), industrial output rose by 6.5% from a year earlier, below the 7.6% increase seen in March and expectations for a smaller slowdown of 7.1%.
Fixed asset investment also missed estimates, recording 8.9% growth (9.1% forecast). Retail sales remained steady at 10.7% against a forecast of 10.6%.
Both fixed asset investment and retail sales were down 0.2% from the previous month, adding weight to the argument that growth in China has reached a peak as authorities take substantive measures to tighten lending standards.
Market reaction to the data was relatively muted, with the Australian dollar dipping briefly before climbing back towards US74 cents.
Iron ore-focused miners Rio Tinto and Fortescue were down more than 0.8% a short time ago, while BHP was down 0.2%.
Within fixed asset investment, the NBS said that public-sector investment growth increased slightly for the year to 13.8%. That was offset by a slowdown in private sector investment of 6.9% growth, from 7.7% in Q1 2017.
That discrepancy between private and public sector growth is likely due in part to measures introduced by the state to curb risky lending.
Chief among those has been a rise in the inter-bank lending rate to decrease cheap sources of funding for small banks that don’t have state backing.
The slowdown in April comes off the back of a strong Q1 for the Chinese economy, when it reported growth of 6.9% — its highest figures in six quarters.
That rate of growth is unlikely to be matched in Q2, as economists worried that the March quarter results were based on the same growth drivers of infrastructure spending and property investment.
Since then the price of iron ore and steel has continued to fall significantly amid concerns about over-supply, and the April figures for industrial production suggest that a pullback in that area of the economy is likely.
The results come as China introduced its global Belt and Road trade initiative to an audience of 29 countries on the weekend.
In an accompanying statement, the NBS delivered a relatively upbeat assessment of the results while exercising a degree of caution.
“As a whole, the national economy in April maintained steady performance and good growth momentum with positive factors accumulating,” it said.
“However, we should be aware that domestic and international conditions remain complex and volatile, structural contradictions have not been addressed fully and some emerging issues need to be followed closely.”