UNEVEN RECOVERY IN CHINA

CHINA DATA SHOW UNEVEN ECONOMIC RECOVERY

The Malaysian Insider, March 10, 2013

HONG KONG, March 10 — China’s uneven economic recovery signals a looming dilemma for policymakers as official data released at the weekend showed inflation at a 10-month high in February while factory output and consumer spending were weaker than forecast.

Data from China’s National Bureau of Statistics showed the consumer price index rose 3.2 per cent in February from a year ago, versus expectations of a 3.0 per cent rise, while annual industrial production (IP) growth in January and February combined at 9.9 per cent was the lowest since October 2012 - the starting point of China’s nascent economic recovery.

The NBS numbers revealed state-mandated fixed asset investment (FAI) was the key driver of economic growth in the first two months of the year, up 21.2 per cent and the strongest in 12 months, while annual retail sales growth of 12.3 per cent was the slackest January and February combined since 2004.

“This data shows that the economy is in the process of a mild recovery and that it is still fragile,” Xu Gao, chief macro-economic analyst at Everbright Securities in Beijing, told Reuters.

“It faces a lot of uncertainties.”

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