China’s economy slowed with spending in infrastructure and real estate bolstering investment at the start of this year, but overall economic conditions in China are slowly stabilizing, according to figures from Chinese National Bureau of Statistics.
The slow improvement is due to the government’s deleveraging campaign to reduce debt and risky lending and the ongoing trade war with the United States. With the trade war, U.S. President Donald Trump said Wednesday he sees a “very good chance” of reaching a trade deal with China but is in “no rush” to reach an agreement.
Growth in infrastructure investment is below expectation. However, government-driven infrastructure investment did rise 4.3 percent year-on-year in the first two months, up from a 3.8 percent growth rate for 2018. Both expansions in spending on roads and railways accelerated to double-digit rates during the period.
And investment in real estate development rose 11.6 percent year-on-year in the first two months of the year, up from a 9.5 percent increase for 2018, which is the strongest since the first 11 months of 2014. But the overall property sector remained weak, with property sales growth plunging to 2.8 percent in the first two months of the year from 12.2 percent in December.
Value-added industrial output, which measures production at factories, mines and utilities, grew 5.3 percent year-on-year in the January-February period, down from a monthly rate of 5.7 percent in December. The growth was the slowest since the first two months of 2002.
Year-on-year growth in retail sales, which include spending by governments, business and households, remained unchanged from December at 8.2 percent.
Fixed asset investment rose 6.1 percent in the first two months of the year, accelerating modestly from the 5.9 percent growth rate posted for all of 2018.