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Global Markets

China's economy shows signs of slowing in April

Workers at a shoe factory in Dongguan, Guangdong province. AFP PHOTO | GREG BAKER
Workers at a shoe factory in Dongguan, Guangdong province. AFP PHOTO | GREG BAKER 

China's factories and workshops saw their output slow sharply in April, data showed Monday, as the world's second-largest economy grapples with weakening demand.

The data comes as China hosts an international summit showcasing its Silk Road project which it hopes will revive ancient trading routes and breathe life into its sputtering economy.

Industrial production rose 6.5 per cent from a year ago, the National Bureau of Statistics said, compared with 7.6 per cent in March and analyst estimates of 7 per cent.

Other figures also disappointed. April retail sales rose 10.7 per cent year-on-year, below the previous month's reading and market forecasts of 10.8 per cent.

Fixed-asset investment, excluding rural areas, rose 8.9 per cent in the first four months of the year, compared with 9.2 per cent in the January to March period.

China's One Belt, One road initiative — a massive network of ports, railways, roads and industrial parks in Asia, Europe and Africa — could provide fresh impetus for growth in the Asian giant.

In recent years China has been transitioning from an investment-driven economic model to one more reliant on consumer spending but it has been a bumpy ride.

The crucial manufacturing sector is also struggling in the face of weaker global demand and excess industrial capacity left over from a debt-fuelled infrastructure boom.

Years of unregulated and risky lending has also raised fears of a looming debt crisis that the International Monetary Fund has warned could "imperil global financial stability".

But in the first three months of the year China expanded by a better-than-expected 6.9 per cent, raising hopes the economy was stabilising after the 2016 growth rate of 6.7 per cent, which was the slowest in a quarter of a century.

Still, further deceleration is expected this year after the government announced in March a trimmed 2017 GDP growth target of "around 6.5 per cent".

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