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Business

China growth slows amid lower demand globally

A host of fresh business figures from China have all confirmed one trend - the world's second-largest economy is losing steam, although growth figures are still impressive by Western standards.

China's National Bureau of Statistics reported Monday that industrial production in the world's second-biggest economy rose by 6.5 percent in April from a year ago, compared with 7.5 percent in March.

The figures marked a sharp slowdown as China grappled with tighter credit conditions and weaker demand.

April retail sales increased by 10.7 percent year on year. Although that figure looked impressive on paper, it was still below the previous month's reading of 10.8 percent.

"All the data sends the same message," Macquarie Securities analyst Larry Hu said in a statement. "The economy slowed down meaningfully in April."

'Silk Road' dreams

There is a big hope in the country that China's "One Belt, One Road" initiative - a massive network of ports, railways, roads and industrial parks in Asia, Africa and Europe - will provide fresh impetus for growth.

Watch video 00:44

China cuts economic growth target

In recent years, China has been transitioning from an investment-driven economic model to one more reliant on consumer spending. But years of unregulated and risky lending have also raised fears of a major debt crisis, which the International Monetary Fund (IMF) has warned could "imperil global financial stability."

There have been attempts recently by banking regulators to rein in risky lending and strengthen chronically weak internal controls.

But analysts have called into question Beijing's willingness to really quit its debt addiction, given lax credit conditions have underpinned the growth China's ruling party relies on for political legitimacy.

hg/jd (AFP, Reuters)

 

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