Chinese consumption and industrial production rose in August

Chinese consumption and industrial production rose in August 2016, exceeding expectations of the analysts and economists and showing the growing trend of the economy. The industrial production increased by 6.3% yoy in August, according to the National Statistical Office. Thus, the sector reported an acceleration of growth, which in July was 6% and slightly exceeded expectations the economists. The heavy industry generates about 30% of Chinese GDP according to estimates by the statistical office, which since 2014 this share is shrinking, but still an essential part of the economy. The consumer spending should take the place of heavy industry. The retail sales in China grew by 10.6% yoy in August, staying above expectations and above the value in July (10.2%).

The investments in fixed assets in urban areas, which are an indicator of long-term costs, rose by 8.1% yoy in August. The rate is the same as in July, but surpassing market expectations. Although the broad measure does not decrease, the growth in government expenditure slowed by 0.4 percentage points to 21.4% yoy in the period January-August 2016. The growth in private investment remained unchanged at 2.1% since the beginning of the year.

Separate data from the Ministry of Finance show that government spending in China increased by 10.3% yoy in August, which is a big jump on the background of increase of 0.3% in July. The state revenues grow by 1.7% in August after a 3.3% increase in July.

In its statement the Finance Ministry stated that downward pressure on the economy will continue for some time. Office is not optimistic because of the poor performance of factories and weakening effect of the measures taken.

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