Chinese factories hold up economic growth despite broad weakness

Beijing: Chinese manufacturers offered the biggest support to the country’s economic stabilisation in the last three months of 2019, thanks to easing trade tensions and improving global demand.

Output in industrial enterprises rose 5.9 per cent from the same period in 2018, the National Bureau of Statistics said on Saturday, bouncing back from an almost decade-low of 5 per cent in the prior quarter. Manufacturers, accounting for more than 85 per cent of total industrial output, grew 5.9 per cent in the quarter, from 4.8 per cent previously, recording the biggest increase since data was available.

The data adds to evidence that Chinese factories — struggling with higher tariffs, deflationary prices and maturing debt — saw demand improve toward the end of 2019, boosted by a turnaround in the global outlook. The signing of the phase-one deal with the US this week will likely carry that momentum further into 2020, on optimism further escalation is prevented for now.

The world’s second-largest economy stabilised at the weakest level in almost 30 years last quarter, as industrial production and manufacturing investment exceeded expectations.

Still, the breakdown released Saturday pointed to residual economic weakness in a wide range of sectors, with 7 out of 11 reporting slower output growth. In particular, expansion in the technology and software sector dropped to 15.6 per cent for a fifth consecutive quarterly decline. Growth in construction, property and consumption businesses also slowed.

China’s statistics authority releases gross domestic product breakdown a day after the headline report, offering greater details on the economy.