China’s factories hold up economic growth despite broad weakness

Bloomberg

Chinese manufacturers offered the biggest support to the country’s economic stabilisation in the last three months of 2019, thanks to easing trade tensions and improving global demand.
Output in industrial enterprises rose 5.9% from same period in 2018, National Bureau of Statistics said on Saturday, bouncing back from an almost decade-low of 5% in the prior quarter. Manufacturers, accounting for more than 85% of total industrial output, grew 5.9% in the quarter, from 4.8% previously, recording the biggest increase since data was available.
The data adds to evidence that Chinese factories — struggling with higher tariffs, deflationary prices and maturing debt — saw demand improve towards the end of 2019, boosted by a turnaround in the global outlook. The signing of the phase-one deal with the US this week will likely carry that momentum further into 2020, on optimism further escalation is prevented for now.
The world’s second-largest economy stabilised at the weakest level in almost 30 years last quarter, as industrial production and manufacturing investment exceeded expectations.
Still, the breakdown released on Saturday pointed to residual economic weakness in a wide range of sectors, with 7 out of 11 reporting slower output growth. In particular, expansion in the technology and software sector dropped to 15.6% for a fifth consecutive quarterly decline.
Growth in construction, property and consumption businesses also slowed.
China’s statistics authority releases gross domestic product breakdown a day after the headline report, offering greater details on the economy.