China's Aug industrial output growth grinds to 17-1/2 year low
By Huizhong Wu and Kevin Yao
BEIJING, Sept 16 (Reuters) - The slowdown in China's factory and consumer sectors deepened in August, with industrial production growing at the weakest pace in 17-1/2 years, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand.
Production rose 4.4% in August year-on-year, slower than the 4.8% growth in July. Analysts polled by Reuters had forecast output would rise 5.2%.
August's data is the slowest growth since February 2002.
Chinese Premier Li Keqiang said in an interview published ahead of the data on Monday that it would "very difficult" for the economy to continue growing at 6% or more and that it faced "downward pressure".
The data also showed retail sales growth at 7.5%, below the 7.9% expected in a Reuters poll and the 7.6% increase in July.
Fixed-asset investment for the first eight months of the year rose 5.5%, according to data published by the National Bureau of Statistics, compared with a 5.6% rise forecast by analysts.
Data last week showed factory-gate prices fell at their fastest pace in three years and analysts predict that producer deflation will continue to worsen in the coming months.
It also follows a factory survey that showed activity shrank for the fourth straight month as the U.S. trade war dragged on. China's imports of unwrought copper also fell 3.8% year-on-year in August, a metal with wide use in infrastructure, power and consumption.
China is in the midst of a more-than-a-year-long trade war with the United States that has upended global supply chains. Trade negotiators are expected to meet later this month, with a top-level summit meeting to be held in Washington in October, though a resolution appears unlikely.
U.S. President Donald Trump had said he would heap on another 5% in tariffs in late August on all $550 billion worth of Chinese goods imported into the U.S.
To counter the weakness, analysts expect the latest slew of numbers will lead to more cuts to key lending rates from Chinese authorities. The government has said it will keep a relatively restrained hand.
China has already cut the amount of cash banks are required to hold in reserve, a move that is expected to release 900 billion yuan ($126.35 billion) for lending to businesses that need the credit.
Private sector fixed-asset investment, which accounts for about 60% of the country's total investment, grew 4.9% in January-August, compared with a 5.4% rise in the first seven months of 2019.
(Reporting by Huizhong Wu and Kevin Yao; Editing by Sam Holmes)
((Huizhong.Wu@thomsonreuters.com; +86 10 56692111; Reuters Messaging: Follow me on Twitter @huizhong_wu))
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