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China economy cooling

November 14, 2017

The world's second-largest economy has further reduced its pace of growth, with factory output missing analysts' expectations. More companies were closed as the government kept fighting industrial pollution.

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Chinese workers
Image: Reuters/J. Lee

China's factory output expanded by 6.2 percent in October year on year, the National Bureau of Statistics (NBS) reported Tuesday.

Industrial production thus slowed last month from 6.6 percent in September as the government moved to wind down output at some steel factories and smelters in a drive to clean up the nation's smog-ridden cities.

Beijing is also pushing to make domestic consumption a growth driver and reduce the country's dependence on manufacturing and exports.

Acute imbalances?

"We must be aware that China is at a pivotal stage for transforming its growth model," NBS spokeswoman Liu Aihua said in a statement. "Problems of unbalanced and insufficient economic development are acute."

China: the cost of debt-fueled growth

Data from the statistics agency also showed that growth in retail sales slowed to 10 percent in October, down 0.3 percent from the previous month and also short of forecasts.

"A cooling property sector and slightly softer foreign demand weighed on the economy last month," Capital Economics analyst Julian Evens-Pritchard said in a research note. "However, these drags continue to be partly offset by still strong infrastructure spending."

China intends to strike a balance between expansion, debt and leveraging, with economists preparing "for some downside bias for the trade and activity data in the coming months."

hg/jd (Reuters, AFP)