Chinese economy loses momentum following policymakers’ clampdown on debt risks

Chinese economy loses momentum following policymakers’ clampdown on debt risks

In April, China's surge took a step back right after a surprisingly sturdy start to 2017, as factory output to investment to retail sales all shrank because authorities clamped down on debt risks, trying to stave off a potentially damaging effect to the Chinese economy.

Waking up to the ongoing threat posed by relatively cheap credit-fueled stimulus since the 2008-9 global financial meltdown, the country’s government has kept tightening the screws on speculative financing for the last several months.

Monday’s data illustrated the broad economic effect of these regulatory curbs, with April’s below-forecast factory output as well as fixed-asset investment in the first four months of 2017, reinforcing evidence of a declining manufacturing sector and also slowing momentum in the world's number two economy.

Financial experts surveyed by Reuters had foreseen factory output would inch up by 7.1% in April, and also tipped fixed asset investment to ascend 9.1% in the period January-April.

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