Winter cuts dent China's industrial output

China's industrial output slowed again in November, official data showed Thursday, as authorities press on with their fight against smog by clamping down on polluting heavy industries.

Output at factories and workshops expanded 6.1 percent year-on-year, the National Bureau of Statistics (NBS) said, against 6.2 percent in October and in line with forecasts in a Bloomberg News survey.

In some northern cities, the government has forced steel factories and smelters to cut production -- with some running at half capacity -- in a drive to clean up the country's notoriously heavy winter smog.

Other enterprises have faced cuts in their natural gas supply as China lurches from supply issues after rapidly transitioning its population away from coal-fired winter heating.

The drastic measures are working, with Greenpeace saying air quality in Beijing last month was considerably better than any other November since 2013.

"The national economy has maintained the momentum of stable growth," said NBS spokesman Mao Shengyong.

"But we should also see that there are still many outside risks and variations, which pose relatively big challenges to high-quality development."

His comments come at a time of uncertainty about the global trade outlook with US President Donald Trump threatening to review numerous deals with other countries and sometimes accusing China of killing American jobs.

Also Thursday, the People's Bank of China increased the amount it charges lenders, hours after the US Federal Reserve hiked interest rates. The PBoC similarly raised its borrowing costs after the Fed in March in a bid to prevent cash from flowing out of the country to chase better investment returns.

During a Communist Party congress last month, President Xi Jinping told delegates China will move to a new era of economic growth focused on quality rather than high growth. To get there, the government is pushing to make domestic demand the pillar of the world's second largest economy.

November's retail sales figures ticked in the right direction for that goal. 

NBS data showed growth increasing to 10.2 percent in November, up 0.2 percentage points from October, but short of Bloomberg forecasts of 10.3 percent.

Strong trade data last week showing sustained export growth indicates China has some time for its large populace to start spending.

Fixed asset investment grew 7.2 percent year-on-year from January to November, in line with expectations, but the fifth consecutive month the reading has fallen.

"The upshot is that consumption and investment appear to have held up reasonably well last month," said Julian Evans-Pritchard of Capital Economics.

This month's figures follow a string of healthy indicators suggesting China's economy is stable even as the government beefs up its war on smog and industrial overcapacity. 

China's gross domestic product is tipped to grow at a faster pace than the government's target this year.

Source:AFP