China’s industrial production is forecast to grow at around 6 percent in 2016 from a year earlier — the same pace as in 2015 — China's ministry of industry and information technology announced Thursday.
China's industrial production rose to 6.2 percent in November from a year earlier, the sharpest rise since June, the National Bureau of Statistics reported Saturday. The pickup suggests that the world’s second-largest economy’s extensive stimulus measures after the summer’s stock rout are gaining traction. Over the past year, Beijing has cut interest rates six times, pushed through new infrastructure projects and relaxed banking regulations to allow for lower bank reserves, freeing up more money to lend.
Despite encouraging signs, analysts have been reportedly wary of calling it a turnaround in the economy as China’s exports declined for five straight months in November and factories continue to battle huge inventories.
“Looking ahead, overcapacity will continue to weigh on industrial production,” ANZ Bank said in a research note cited by the Wall Street Journal. “While high-end manufacturing could continue to outperform, the overall trend remains weak."
Meanwhile, authorities are trying to steer the Chinese economy into a consumer-driven model to compensate for a slowdown in infrastructure spending. As overall gross domestic product growth sputtered to 6.9 percent in the last quarter — its slowest rate in six years — pressure has increased on the People's Bank of China to ramp up fiscal expenditure.
"The first half of next year is still going to be difficult,” Macquarie Securities economist Larry Hu told the Journal, adding: “Growth is still not very strong.”