China’s industrial output slows

The global economic slowdown has affected China as the industrial output has grown at is slowest pace for over seven years, with an increase of 8.2 percent compared to last year, which has taken economists by surprise.

This has increased fears of a prolonged recession elsewhere, as China is the biggest contributor to global economic growth, but with domestic demand and global demand for the country’s exports at a new low, it seems as though China’s growth is stumbling.

Even though analysts were unanimous that the Chinese economy was slowing, it was still expected that growth would still be a two digit figure, and because industrial output has fallen, it is an even greater risk to the export dependent country.

With this sudden and unexpected loss of momentum, it is believed that the central bank may act by cutting interest rates for the fourth time in two months to complement the 4 trillion yuan (£374 billion, $586 billion) package announced a few days ago.

The yuan traded at 6.8301 against the dollar and has remained static since the industrial output announcement, although the CSI 300 Index of stocks rose 3.3 percent following the promise of increased government spending.

There is a problem that is being faced though due to the industrial slowdown, because stock is being built up, many factories have enough inventory to provide customers without producing anything, according to economists.

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