Chinese economic data missed across the board in May, creating renewed concerns over a slowdown in the second half of the year.
Investment in fixed assets in urban area was particularly weak, driven primarily by softer infrastructure work.
According to China’s National Bureau of Statistics (NBS), urban fixed asset investment grew by just 6.1% between January to May compared to the same period a year earlier, well below the 7.0% annual increase seen in the first four months of the year.
It was the weakest growth seen since February 1996, according to Reuters calculations, and well below the unchanged reading expected by economists.
The NBS said the sharp deceleration largely reflected weaker infrastructure investment.
Investment in the private sector — accounting for around 60% of total investment — grew at an annual pace of 8.1% in the first five months of the year, down from 8.4% between January to April.
Investment in the property sector grew 10.2% from a year earlier, down fractionally from the 10.3% annual pace seen in the first four months of the year.
So far this year, property sales by floor area grew by 2.9% compared to the same period in 2017.
Mirroring the investment performance, both industrial output and retail sales also undershot economist expectations in May.
Industrial output grew by 6.8% from a year earlier, down from 7% in the 12 months to April and below the 6.9% level expected.
Mining output increased by 3.0% over the year, outpaced by growth of 6.6% and 12.2% respectively for manufactured goods and the production and supply of electricity, thermal power, gas and water.
Retail sales also whiffed, growing by 8.5% over the year, down from 9.4% in April.
It was the weakest result since June 2003, and well below forecasts for an acceleration in sales to 9.6%.
A spokesperson for the NBS said the result was driven by seasonal factors leading to delayed consumption.
Despite the broad-based slowdown, the NBS described the economy’s performance in May as “steady and sound” with “good momentum”.
However, it raised concerns about external factors that could create headwinds for the economy in the period ahead.
We must be aware that the external instabilities and uncertainties are increasing,” the NBS said.
“The problems of unbalanced and inadequate development in China are acute and the foundation for the economy to maintain the sound momentum needs to be strengthened.
“We should follow the general working guideline of making progress while maintaining stability, focus on the supply-side structural reform, coordinate the efforts in stabilizing growth, stimulating reform, adjusting structure, benefiting people’s livelihood and fending off risks.”
On Friday, the US government will finalise a list of up to $US50 billion in Chinese imports that will be subject to 25% tariffs.