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Growth in China’s investment and factory output in August has come in below forecasts, in a further indication that the world’s second-largest economy is losing steam. Factory output grew by 6.1% from the year before – below forecasts of 6.4%. Growth in fixed-asset investment – largely property – slowed to 10.9% for the year-to-date, a 15-year low.
Growing evidence that the world’s economic powerhouse is slowing down has caused major investment market falls. Other indications that the economy is weakening can be seen in falling car sales and lower imports and inflation. Chinese manufacturers cut prices at their fastest pace in six years, largely on the back of a drop in commodity prices, which have dropped sharply over the past year as demand from China faltered.
Last week, the Chinese Premier, Li Keqiang, said China remained on track to meet all its economic targets for this year despite the economic data. China has already cut interest rates five times since November to encourage lending and spur economic activity, along with other measures to boost growth. Premier Li pledged that China would take more steps to boost domestic demand and that it would implement more policies designed to lift imports.
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