- Takuji Okubo, chief economist at Japan Macro Advisors
The Chinese economy continued to remain unresponsive to Beijing's efforts to kick-start the growth rebound, with slower lending and investment data signalling that the People's Bank of China should consider deploying more stimulus measures to shore up growth. China's industrial production increased 5.9% in April from the previous year, following the 5.6% gain in March, that marked the weakest level since 2008. Fixed-asset investment rose 12%, the least in almost 15 years and against economists' forecast of a 13.5% gain, according to the National Bureau of Statistics. The central bank said new yuan loans were 707.9 billion yuan in April, also less than expected by economists.
The weakness suggests the People's Bank of China's efforts to free up more bank deposits for loans, and two interest-rate cuts before April, were not sufficient to drive much of a rebound after a first-quarter economic slowdown. Other data showed retail sales rose 10% in April, measured on a 12-month basis, compared with the median forecast of 10.4%. It is estimated that real growth has dipped below the leadership's 2015 target of about 7% to 6.4% in April. In response to underlying economic problems, policy makers unveiled further action May 10, with a third cut in benchmark lending rates. Economists expect more such moves.
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