BEIJING • China reported weaker-than-expected investment and retail sales last month and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the US.
Fixed asset investment grew the slowest since 1999, while the pace of retail sales softened to a four-month low, suggesting a long-anticipated slowdown in the world's second-largest economy may finally be setting in.
The lone bright spot from yesterday's activity data was industrial output, which jumped more than expected as automobile and steel production surged.
"Industrial activity was buoyed by the easing of pollution controls (imposed over the winter). But there are signs in the rest of today's data that the economy is losing momentum," Capital Economics senior China economist Julian Evans-Pritchard wrote in a note following the data.
"Domestic spending is likely to continue to soften given the headwinds from slowing credit creation," he said, adding that the rebound in industry may be short-lived once companies rebuild inventories that were depleted in recent months.
Industrial output rose 7 per cent last month, the National Bureau of Statistics said, up from a seven-month low of 6 per cent in March.
Sino-US trade frictions have yet to show an impact on China's economy, the statistics bureau added.
But while April exports and imports were surprisingly solid, business surveys point to a sharp weakening in export order growth, possibly as companies grow worried about being stuck with high inventories if the US and China start imposing tit-for-tat tariffs.
Analysts also suspect some firms may be rushing out shipments to beat any punitive trade measures, flattering the most recent export figures but blunting future gains.
Investment growth slowed pretty much across the board, adding to views that rising borrowing costs are starting to drag on activity.
Real estate investment rose 10.2 per cent last month on-year, slowing from a 10.8 per cent rise in March, according to Reuters' calculation based on the official data.
Property sales by floor area fell 4.1 per cent in April, the biggest drop in six months, compared with a 3.2 per cent rise in March.