23 Mar

Will China’s Improved Industrial Production Impact Manufacturing?

WRITTEN BY Sarah Sands

China’s industrial production

According to the National Bureau of Statistics of China, on a year-over-year (or YoY) basis, the country’s industrial production rose 6.3% in February 2017, compared to an equal rise of 6.3% in January.

February’s reading was just below the market’s expectation of a 6.4% rise. The data were released on March 13, 2017.

Will China’s Improved Industrial Production Impact Manufacturing?

Sectoral composition

China’s manufacturing output rose 6.9% in February. The country also saw improvements in electricity, water production and supply, and gas output. Output in all these spaces rose 8.4%. However, output in the mining sector fell 3.6%.

Firm industrial production data are a good sign for the economy, which has gone through various critical phases in recent years. The slowdown in China’s economy has affected the whole world (ACWI) (VEU) (VTI), as China (YINN) (FXI) is a main trading partner for most other economies.

China (MCHI) (ASHR) has invested a significant amount of funds into infrastructure, which will likely provide it with returns in the long term. The country is shifting from a manufacturing-based economy to a consumer-based economy. According to Mark Mobius, executive chair of Templeton Emerging Markets Group, this transition will take nearly five years. However, it should eventually drive growth in the economy.

In the next part of this series, we’ll analyze the performance of the Eurozone ZEW economic sentiment index.

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