With every release of economic data out of China, there’s a fear of how its economy may have slowed and its potential impact on the global economy and especially Australia.
That worry was again substantiated on Thursday, as new data was released that showed Chinese industrial output fell in the first two months of the year to its lowest level since 2002.
Production growth fell 0.4 per cent on the December figure and below expectation, showing that the manufacturing, mining and utility sectors continue to slow.
In fact, manufacturing output in China contracted for the first time since 2009, as falling global demand falls and US tariffs continue to bite Chinese exports.
While that should concern Australia which remains heavily dependent on China, the bad news is partly offset by steady retail sales and government investment, NAB senior economist David De Garis told Trading Day.
“It’s pretty clear when we look across the suite of manufacturing and trade numbers through the second half of last year that we did see a measurable slowdown,” De Garis said.
“It’s hard to escape the conclusion that it has been affected.”
With the trade war remaining unresolved, the Chinese government has again ramped up investment in rail and road projects in order to stimulate the economy.
Watch above for more analysis.