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China Jan-Feb factory output +6.3% y/y, investment up 8.9%, beating forecasts

China's factory output rose 6.3 percent in January-February from the same period a year earlier, while fixed-asset investment grew 8.9 percent, both beating expectations.

Workers assemble televisions on the production line of Tianle Group Co., Ltd on July 3, 2012 in Shengzhou of Zhejiang Province, China.
Feng Li | Getty Images
Workers assemble televisions on the production line of Tianle Group Co., Ltd on July 3, 2012 in Shengzhou of Zhejiang Province, China.

Analysts polled by Reuters had predicted factory output would growth 6.2 percent in the first two months this year, picking up from December's 6.0 percent as demand for manufactured goods improves at home and abroad.

Analysts had expected fixed-asset investment growth of 8.2 percent, quickening from 8.1 percent in the whole of 2016.

Growth of private investment quickened to 6.7 percent from 3.2 percent last year, the National Bureau of Statistics said on Tuesday, suggesting an improved appetite from private firms to invest after a sharp loss of momentum in the last few years.

Private investment accounts for about 60 percent of overall investment in China.

Retail sales growth was well below expectations, however. Retail sales rose 9.5 percent in January-February from a year earlier. Analysts had forecasted they would rise 10.5 percent, easing from December.

China combines January and February activity data in a bid to smooth out seasonal distortions caused by the timing of the long Lunar New Year holidays, which began in late January this year but fell in February last year.

The country is targeting growth of around 9 percent in fixed asset investment for 2017, while retail sales were expected to increase about 10 percent, the state planner said during the nation's annual parliamentary session this month.

China has cut its economic growth target to about 6.5 percent this year to give policymakers more room to push through painful reforms to contain financial risks. The economy grew 6.7 percent in 2016, the slowest pace in 26 years.

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