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China's economy kicks off 2018 on forecast-beating data

Xinhua | Updated: 2018-03-15 14:13
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BEIJING - China's economy kicked off 2018 on a strong note with better-than-expected data for the first two months.

Industrial output expanded at 7.2 percent year-on-year in the first two months, accelerating from 6.2 percent growth in December 2017, the National Bureau of Statistics (NBS) said in a statement.

The growth was faster than the 6.3 percent growth during the same period last year, and was well above analyst expectations.

Retail sales of consumer goods grew 9.7 percent year-on-year, faster than the same period last year.

Fixed-asset investment grew 7.9 percent, up from 7.2 percent for the full year of 2017.

"The economy had a good start with accelerating industrial production, active consumption, and stable prices," said NBS spokesperson Mao Shengyong.

A breakdown of the data pointed to higher quality growth, which the country has been trying to prioritize over mere pace.

Industrial structure continued to improve, with production in high-tech industries and the equipment manufacturing sector expanding by 11.9 percent and 8.4 percent, respectively.

Output of new energy vehicles saw a surge of 178.1 percent year-on-year during the period, while industrial robots production jumped by 25.1 percent, NBS data showed.

While such rapid growth was partly due to a low comparable base, it indicated that emerging sector expansion is accelerating, according to Mao.

The mining sector grew by a modest 1.6 percent year-on-year, lagging behind the 7 percent growth achieved by the manufacturing sector.

Amid the drive to restructure and optimize industry, the country aims to reduce overcapacity in traditional sectors such as coal, iron, and steel while facilitating growth in emerging areas.

China plans to cut 30 million tons of ineffective steel capacity and 150 million tons of coal capacity in 2018, according to a government work report released earlier this month.

Wednesday's data also showed that consumers in China tend to spend more on high-quality goods, a trend that is in line with the country's overall consumption upgrade.

One of the main contributors to retail sales growth was automobile sales. While the total volume of sales only saw modest climb, the average sales price jumped, indicating that the demand for cars is more quality-oriented, according to Mao.

"China's economy has maintained a stable and sound momentum. Such momentum will lay a solid foundation for the economy to achieve its annual growth and employment target," Mao said.

China aims to see economic expansion at around 6.5 percent this year, unchanged from 2017, according to the government work report.

It also planned to keep the surveyed urban unemployment rate within 5.5 percent, the first time the country has used this indicator as a projected target.

In the first two months, the urban unemployment rate was below 5 percent, lower than the same period last year, NBS data showed.

In 2017, the economy achieved better-than-expected growth of 6.9 percent, underpinned by strong consumption, stable investment, and a comeback in exports.

Earlier data showed that China's export growth in February came in at 36.2 percent, a high reading that analysts said was a surprise given that holiday effects were expected to limit the pace of increase.

As China continues to improve the quality of goods, exports should be able to keep stable growth, Mao said.

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