China’s economy showed further signs of fatigue in November, with factory output growth slowing more than expected and growth in investment near a 13-year low, putting pressure on policymakers to unveil fresh stimulus measures.
In a sign that banks were already responding to Beijing’s instructions to reflate the economy, however, new lending jumped 56 percent in the month.
Weighed down by a sagging housing market, China’s economic growth had already weakened to 7.3 percent in the third quarter, so November’s soft factory and investment figures suggest full-year growth will miss Beijing’s 7.5 percent target and mark the weakest expansion in 24 years.
“The data bodes ill for GDP growth in the fourth quarter, which is bound to slow further,” said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.
Growth in real estate investment also slipped for the first 11 months of 2014, though property sales registered their best month this year, buoyed by Beijing’s efforts to revive a sector on which so much of the economy depends.
After September’s move to cut mortgage rates and downpayments for some home buyers, the People’s Bank of China cut interest rates on Nov. 21 for the first time in two years.
The surprise rate cut signaled policymakers’ growing concern that a sharper slowdown in the economy would raise the risk of job losses and loan defaults.