China's May industrial output growth cools to 17-yr low as trade war bites

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Published on June 14, 2019 - Duration: 01:39s

China's May industrial output growth cools to 17-yr low as trade war bites

China's industrial output growth unexpectedly slowed to a more than 17-year low in May in the latest sign of weakening demand as the US ramps up trade pressure.

David Pollard reports.

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China's May industrial output growth cools to 17-yr low as trade war bites

All eyes on China to scan for any signs of weakness in the face of U.S. trade threats.

Politically, there are none, is the official line.

(SOUNDBITE) (Mandarin) CHINESE COMMERCE MINISTRY SPOKESMAN, GAO FENG, SAYING: "If the U.S. wants to force China to yield through unilateralism and maximum pressure, this will certainly not succeed." Economically, the damage is becoming more visible.

May industrial output was up 5.0% year on year an enviable rate for other economies.

For China, its weakest reading since 2002.

Fixed-asset investment is also slower in the latest data.

And earlier this week, China's auto association reported the worst-ever drop in sales, completing a picture of sluggish demand suggested by recent import, lending and factory surveys.

What brighter spots there are come from retail: sales beat forecasts in May And steel output in what is the world's biggest steelmaker hit a record high.

Even as, in the same month, trade talks with the U.S. aimed at removing punitive tariffs on billions of dollars of goods - failed .

(SOUNDBITE) (Mandarin/English) CHINESE COMMERCE MINISTRY SPOKESMAN, GAO FENG, SAYING: "As people often say: 'Nothing is agreed until everything is agreed.'

It's the U.S. who is reneging, being dishonest and unilaterally escalating trade tensions which has led to the serious breakdown in talks." Bulls on China are pinning their hopes on recent rounds of monetary and fiscal stimulus boosting the economy.

Talks between Donald Trump and Xi Jinping at a G20 summit later this month have also been proposed.

Expectations of a breakthrough from those, though, appear limited.

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