Gold Silver Reports (GSR) – China’s Economic Growth Remains Robust Amid Strong Retail Sales — Steady growth offers support for President Xi Jinping’s mission to shore up financial stability, one of Beijing’s top goals along with reducing poverty and curbing pollution. The robust pace of expansion is a tailwind for the global economy which is seen maintaining its solid performance this year, providing needed support in the form of strong demand for China’s exports.
Retail is getting a lift from online sales, which rose 35.4 percent in the first quarter. Another driver of activity was investment in environmental protection and cleanup, which surged 34.2 percent on year in the first quarter, according to the statistics bureau.
People’s Bank of China Governor Yi Gang last week said economic indicators performed better than expected in the first quarter amid continued improvement in the global outlook.
Industrial output by the mining sector decreased 1.1 percent in March, compared with a 0.9 percent drop in December, while output for power supply increased 5.8 percent, less than the 8.2 percent increase in December.
“March data point to nascent signs of a growth slowdown underway, led by old economy sectors,” said Rob Subbaraman, chief economist for Asia ex-Japan at Nomura Holdings Inc. in Singapore. “We don’t expect growth in new economy sectors to fully offset the slowdown in the old, heavily-indebted sectors of the economy in the quarters ahead. This is a necessary adjustment to improve the quality of China’s growth.”
Headwinds may strengthen in coming months should Xi’s so-called critical battles against financial risk and pollution bite deeper or if trade tensions with the U.S. intensify. Property and infrastructure activity will weaken in the second half of this year, though manufacturing investment, solid consumption and strong external demand will cushion the impact, says UBS Group AG.
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“This shows us that China can attain the growth target easily in 2018 even with slightly slower expansion in the second half,” said Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group Ltd. in Hong Kong. “It provides a good window to address some structural issues, especially deleveraging.” – Neal Bhai Reports – (NBR) INDIA
