China industrial output offers fresh sign of stability

Beijing: China's industrial output growth held steady in January and February, official data showed Tuesday, providing further evidence of stability in the world's second-largest economy despite slower retail sales growth.

Industrial output rose 6.3 percent year-on-year in the first two months of 2017, according to the National Bureau of Statistics, slightly beating the 6.2 forecast in a Bloomberg News survey.

Retails sales, a key indicator of consumer spending, increased 9.5 percent over the period, down from 10.2 percent in the same period last year. Sales grew 10.9 percent in December.

Fixed-asset investment, a gauge of infrastructure spending, rose 8.9 percent year-on-year in January-February.

Real estate investment increased a surprising 8.9 percent in the period, up from 3.0 percent over the same stretch last year, despite tighter regulations to thwart speculators and guard against a feared property bubble.

Most data are "quite positive" and "apparently improving", NBS spokesman Sheng Laiyun said in a news briefing.

The figures are the latest in a slew of upbeat data including positive fourth-quarter 2016 economic growth, and encouraging February results on factory activity, imports, and factory gate prices.

"China's economy is opening the year with a good start, although pro-growth policies to shore up consumption in coming months are needed," Gao Yuwei, a researcher at the Bank of China Ltd.'s Institute of International Finance, told Bloomberg News.

"Fixed-asset investment got a boost largely because of infrastructure projects," Tommy Xie, economist at OCBC Bank, told Bloomberg, adding that "the proactive fiscal policy is playing out well".

However, rapid investment growth to boost the economy "will be difficult to sustain given clear signals that the fiscal and monetary policy stance will be less supportive this year", Julian Evans-Pritchard of Capital Economics said in a note.

Premier Li Keqiang announced a 2017 official economic growth target of "around 6.5 percent, or higher if possible" in a government work report delivered to the National People's Congress on March 5, citing even "more complicated and graver situations" facing China this year.