- Li-Gang Liu, ANZ economist
Factory production and fixed-asset investment in China were both weaker than expected, underscoring the growing challenge for the government in reaching its full year growth goal of around 7%. China's industrial production increased 6.1% year-over-year in August, according to the National Bureau of Statistics. Fixed-asset investment in non-rural areas of China increased 10.9% in the January-August period compared with the year-earlier period. This was below expectation and slower than the 11.2% rise recorded in the January-July period. At the same time, retail sales surged 10.8% in August, beating the market expectations of 10.6% rise. The NBS said an important driver behind the retail sales rebound was a faster rise in consumer prices. Excluding prices, real retail sales growth in August was just 10.4% year-over-year, the same as in July.
At a meeting of global business leaders in China last week, Premier Li Keqiang said achieving 7% growth in the first half "has not been easy" but added that systemic risk has abated and the world's second biggest economy remains on track to meet all major targets this year. China's economy expanded 7.3% in 2014, its weakest performance in 24 years and growth has slowed further so far this year. China's GDP increased 7.0% in each of the first two quarters of this year.
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