BEIJING • China's investment, factory output and retail sales all grew more slowly than expected in April, adding to doubts about whether the world's second-largest economy is stabilising.

Growth in factory output cooled to 6 per cent in April, the National Bureau of Statistics (NBS) said last Saturday, disappointing analysts who expected it to rise 6.5 per cent on an annual basis after an increase of 6.8 per cent the prior month.

China's fixed-asset investment growth eased to 10.5 per cent year-on-year in the January to April period, missing market expectations of 10.9 per cent, and down from the first quarter's 10.7 per cent.

Fixed investment by private firms continued to slow, indicating private businesses remain sceptical of economic prospects. Investment by private firms rose 5.2 per cent year-on-year in January-April, down from 5.7 per cent growth in the first quarter.

"It appears that all the engines suddenly lost momentum, and growth outlook has turned soft as well," Mr Zhou Hao, an economist at Commerzbank, said in a research note. "At the end of the day, we have to acknowledge that China is still struggling."

China's banking regulator had sent an urgent notice to banks on Saturday telling them to clear bottlenecks holding back lending to private firms.

In its data announcement, the statistics bureau said: "Because the total amount of private investment is relatively large, its continued slowdown could restrain stable growth, and requires a high degree of attention."

Retail sales growth in April, which captures both private and government purchasing, rose 10.1 per cent on an annual basis, slower than expected. Analysts had forecast sales would rise 10.5 per cent on an annual basis, the same percentage increase as reported for March.

It was upbeat March data that sparked hopes China's economy was picking up in the wake of a more than year-long blitz of fiscal, monetary and administrative stimulus measures. A recovering property market has also boosted demand for raw materials, giving a boost to long ailing heavy industries such as steel mills.

But much of the data on April, which included weaker-than-expected exports and imports, plus soft factory activity surveys, continued to underline lingering weakness in the broader economy.

The only bright spot was investment in housing, which grew 9.7 per cent in April from a year earlier.

China's economic growth has cooled to 25-year lows, weighed down by a combination of weak demand at home and abroad, factory overcapacity and increasing amounts of debt.

The government has made reducing the capacity glut one of its top priorities, and has vowed to put "zombie" companies out of business. But economists expect the authorities to move slowly to avoid a sharp jump in unemployment.

REUTERS