China’s Economy Steadies Even as Investment Growth Slows

China’s economy steadied in May as factory production held up and consumers and the government offered support against diminishing growth in private investment, which has been hurt by declines in old-line industries such as coal.

Bloomberg’s monthly tracker for gross domestic product growth showed a 6.9 percent gain for May, little changed from April and comfortably within the leadership’s annual target for 2016. The gauge, updated after monthly data Monday, had swung from around 6.3 percent in the first two months of the year to 7.1 percent in March, when a lending spree juiced growth.

Industrial production rose 6 percent from a year earlier in May, matching economists’ estimates, National Bureau of Statistics data showed. Retail sales climbed 10 percent last month, while fixed-asset investment increased 9.6 percent in the first five months of 2016 -- missing all 38 economist forecasts and the slowest pace since 2000.

Combined with improving imports and moderating factory-gate deflation last month, the data suggest that policy makers have underpinned the near-term outlook with monetary stimulus and fiscal support, even as restructuring initiatives in some industries start to bite.

‘Remains Challenging’

"Private investment growth continues to fall, but overall it is being offset by public investment," Hao Hong, chief China strategist at Bocom International Holdings Co. "The overall economic environment remains challenging."