Xiaoyi Shao and Kevin Yao Beijing
CHINA’S economy showed further signs of fatigue in November, with factory output growth slowing more than expected and growth in investment near a 13-year low, putting pressure on policymakers to unveil fresh stimulus measures.
In a sign that banks were already responding to Beijing’s instructions to boost the economy, however, new lending jumped 56 percent in the month.
Weighed down by a sagging housing market, China’s economic growth had already weakened to 7.3 percent in the third quarter, so November’s soft factory and investment figures suggest full-year growth will miss Beijing’s 7.5 percent target and mark the weakest expansion in 24 years.
Growth in real estate investment also slipped for the first 11 months of 2014, though property sales registered their best month this year, buoyed by Beijing’s efforts to revive a sector on which so much of the economy depends.
After September’s move to cut mortgage rates and downpayments for some home buyers, the People’s Bank of China cut interest rates on November 21 for the first time in two years.
The surprise rate cut signalled policymakers’ growing concern that a sharper slowdown in the economy would raise the risk of job losses and loan defaults.
Factory output rose 7.2 percent in November from a year earlier, down from October’s 7.7 percent, the National Bureau of Statistics said on Friday, and missing analysts’ forecasts of 7.5 percent.
Fixed-asset investment, an important driver of growth, grew 15.8 percent in the first 11 months from the same period last year, slipping from 15.9 percent in the first 10 months.
The rise in new loans comes after sources on Thursday said that the People’s Bank of China had instructed banks to lend more and had quietly relaxed the enforcement of loan-to-deposit ratios to further that end. –
Reuters