The industrial output data reflects an escalation of US-China trade tensions.
The world’s second-largest economy is struggling with the renewed US-China trade tensions. In May this year, China’s industrial output growth fell to its lowest level in more than 17 years.
According to data released by the National Bureau of Statistics of China the above-scale industries increased by 5% year-on-year. The May data is also significantly lower than the 5.5% forecast by economists surveyed by Reuters.
In May, some aspects of the Chinese economy did show some vitality. In May, China’s total retail sales growth rebounded strongly, from 7.2% in April to 8.6%. April was the worst month since 2003. Economists surveyed by Reuters expect total retail sales to increase by only 8.1% in May.
The industrial output data reflects an escalation of US-China trade tensions. In mid-May, US President Donald Trump raised the tariff on $200 billion in Chinese exports to the United States to 25%. Retaliation by Beijing has imposed tariffs on about $60 billion of US exports to China.
Although the Chinese economy grew faster than expected in the first quarter of this year compared to the last three months of 2018, analysts said that a large part of this was due to stimulus measures and ease of credit flows.
In recent weeks, Beijing has strengthened its support measures to support economic development, such as encouraging local governments to use special bonds in major projects.
