China factory output, retail sales beat expectations
China's factory output and retail sales beat expectations in the January-February period, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence. Industrial output rose 7 percent in the first two months of the year, data released by the National Bureau of Statistics (NBS) showed on Monday, above expectations for a 5 percent increase in a Reuters poll of analysts and faster than the 6.8 percent growth seen in December. It also marked the quickest growth in almost two years. Retail sales, a gauge of consumption, rose 5.5 percent, slowing from a 7.4 percent increase in December. Analysts had expected retail sales to grow 5.2 percent. The housing market saw slower declines in property investment and sales, buoyed by government efforts to arrest a downturn in the sector. Property investment fell 9 percent year-on-year in the first two months of 2024, compared with a 24 percent fall in December 2023, NBS data showed. Property sales by floor area logged a 20.5 percent slide, compared with a 23 percent fall in December last year. Hwabao Trust economist Nie Wen said real estate remains in a downtrend, and that a smaller slowdown in investment is unlikely to change that with developers still struggling for cash flow. "But the phase when property had the greatest negative impact on the economy should have passed, and it needs to be seen when the sector will bottom out," Nie said. Fixed asset investment, meanwhile, expanded 4.2 percent year on year, versus expectations for a 3.2 percent rise. It grew 3 percent in the whole of 2023. Notably, private investment grew 0.4 percent in the first two months, reversing the decline of 0.4 percent in the whole year of 2023. The urban unemployment rate stood at 5.3 percent in the January-February period, with the NBS describing the employment situation as generally stable. The jobless rate for 16-24 years old, excluding university students, was 14.6 percent in January, down from 14.9 percent in December. Together with better-than-expected trade data and consumer inflation, Monday's indicators will provide some temporary encouragement for policymakers as they try to shore up growth in the world's second-largest economy to keep it on track for an expansion of around 5 percent this year. But analysts say achieving such growth would be more challenging than last year, which had a lower base effect. (Reuters, additional reporting by Xinhua)