China’s economy stabilised last quarter after slowing to the weakest pace in almost three decades, with the first acceleration in investment since June signalling that a firmer recovery could be underway.
Gross domestic product rose 6% in the final quarter of 2019 from a year earlier, the same as in the previous three-month period and the median estimate
Fixed-asset investment rose 5.4% in the year, increasing its pace in the final month particularly through a jump in manufacturing expenditure
The world’s second-largest economy expanded by 6.1% in 2019, slower than 6.6% the previous year but in line with the government’s target. The signing of the phase-one trade deal with the US this week combined with recovering global demand has improved the outlook for Chinese factories and exporters in 2020, though uncertain implementation of that deal and domestic financial fragility remain risks.
Chinese stocks inched higher and the offshore yuan gained, trading at $6.8715 at 10:48am in Shanghai.
Industrial output rose 6.9% in December from the same period the previous year, versus the median forecast of 5.9%. Some of that may be due to the effects of Chinese New Year. That holiday is earlier this year than in 2019, and companies may have increased production in December ahead of a shutdown later this month. Retail sales rose 8% versus an estimate of 7.9%.
“The latest GDP and IP data provides a very positive start to the Chinese New Year for China’s economy,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit in Singapore. “The outlook for 2020 is for continued robust growth, boosted by the Phase One trade deal with the US and the continued positive impact of government monetary and fiscal policy stimulus measures.”
The surveyed unemployment rate ticked up to 5.2% in December from 5.1%, signalling that the manufacturing-led slowdown in 2019 may be filtering through to the labour market.
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