China’s economic activity remained strong in first quarter, but outlook is cloudy says CBB

Office towers under construction are seen along Guoxing Boulevard in Haikou's new central business district in Hainan province, China January 11, 2018. REUTERS/Matthew Miller

Vastavam web: China’s economic activity remained strong in the first quarter, with hiring close to a record high, but the outlook is cloudy as two key growth engines – property and commodities – show signs of cooling, a private survey showed on Wednesday.While first-quarter revenue looked strong, every sector except manufacturing saw profit growth weaken from late 2017, while investment and cash flow softened, according to the quarterly survey of thousands of Chinese firms by China Beige Book International (CBB).

Weakness in the retail sector is of particular concern, with domestic demand hardly looking robust enough to support growth if China’s exports suffer from punitive U.S. trade measures, CBB added.Defying expectations for a winter lull, Chinese steel companies continued to ramp up output in response to strong sales, and also boosted borrowing, capital expenditures and hiring, the survey showed.The consensus view had called for a slowdown in production as Beijing cracks down on industrial pollution and closes older, less efficient mills.Despite Beijing’s pledge to continue to reduce excess capacity, the steel sector hiked overall capacity for the eighth straight quarter, CBB said.