China’s factories and building sites began the year in bustling good form, judging from the latest set of real economy indicators released by the National Bureau of Statistics on Tuesday.
Fixed-asset investment, which captures the level of capital expenditure across the economy, grew 8.9% in January and February, beating economists’ expectations for an 8.3% rise. Capex in the real estate sector rose in line with the broader gauge, but that 8.9% increase marked a substantial advance on 2016’s 6.9% growth.
Industrial production growth of 6.3% pipped the 6.2% median estimate of analysts polled by Bloomberg.
But while retail sales expanded at a faster 9.5% clip, they undershot the consensus forecast of 10.6%.
The figures, on balance, confirm what China’s head statistician Ning Jizhe told reporters over the past weekend during this year’s session of the National People’s Congress: the economy shows signs of improvement with little risk of a hard landing.
Ning revealed several key economic gauges ahead of their official release, including the 6.3% gain in power generation, with a 6.9% uptick in consumption. Ning also said freight shipments by volume rose 8.3%, with rail cargo up by double-digits.
The sectoral data breakdown lends support to initial findings from the bureau’s Manufacturing PMI report, which saw the index rising to 51.6 in February, its fifth consecutive month above 51.
China is enjoying an accelerated level of economic activity that saw fourth-quarter gross domestic product registering a marginal, albeit significant upturn to 6.8%. That followed seven quarters of pullback, with the economy moving at its slowest pace in 26 years. Progress and stability are the buzzwords for 2017 under President Xi Jinping’s framework of “new normal.”
The year-end recovery will have provided a welcome fillip for Xi and his team, but came with a price. The massive jump in property prices, and the risks that come with inflated real estate valuations.
Beijing is looking to inject new vitality into the economy while ensuring more balanced growth, trying to pull itself away from over reliance on the real estate market. The report on February housing prices across China’s 70 large cities is due to be released on March 18.