China factory growth hits a three year low

Ben Southwood
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CHINA’S factories increased their output at the slowest rate in over three years in August, according to data from the country’s National Bureau of Statistics out yesterday.

Industrial output was up 8.9 per cent on the year, driven by fixed asset investment that was 20.2 per cent higher during the first two thirds of 2012 than in 2011. Retail sales grew 13.2 per cent.

While these figures are almost inconceivable to stagnant Europe, the industrial output number is the lowest in 39 months, and in China the figures are considered slow.

“The headline numbers do not look very good and they suggest a pretty challenging outlook for policymakers,” said Zhang Zhiwei, top Chinese economist for Nomura.

This came as China rolled out a new one-year subsidy scheme, whose goal is to incentivise consumption of energy-efficient appliances and electronics, according to the official press agency Xinhua.

And China also met with the US, Japan, and other countries in the Asia-Pacific area, agreeing to slash protectionist duties, especially on green technology, in order to bolster growth and help tackle problems caused by the Eurozone debt crisis.