Cries for more stimulus ring loudly in China because Chinese industrial output slowed to 6.9%. That is a number that any country in the world would be more than pleased with, but China’s target is 7.5%.
Why 7.5%? In fact, why should there be any targets at all? The economy is not a car that can be steered by bureaucrats to perfection.
Nonetheless, Calls Grow for More Stimulus, as China August Factory Growth Slows to Near Six-Year Low.
China’s factory output grew at the weakest pace in nearly six years in August while growth in other key sectors also cooled, raising fears the world’s second-largest economy may be at risk of a sharp slowdown unless Beijing takes fresh stimulus measures.
Industrial output rose 6.9 percent in August from a year earlier – the lowest since 2008 when the economy was buffeted by the global financial crisis – compared with expectations for 8.8 percent and slowing sharply from 9.0 percent in July.
“The August data may point to a hard landing. The extent of the growth slowdown in the third quarter won’t be small,” said Xu Gao, chief economist at Everbright Securities in Beijing.
This post was published at Global Economic Analysis on Saturday, September 13, 2014.
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