China's factory output and consumer spending compromised in April as a tariff war with Washington intensified, adding to pressure on Beijing to shore up shaky economic growth.
 
Wednesday's all of a sudden weak data prompted suggestions Beijing has to boost stimulus spending and bank lending to hit this year's official economic growth target of 6 percent to 6.5 percent.
 
President Xi Jinping's government has expressed confidence the economy can hold up to U.S. tariff hikes in their fight over Chinese technology ambitions and other trade irritants. But forecasters say damage might spread beyond export-driven manufacturing industries if consumer and business confidence suffers, depressing spending and investment.
 
Consumer demand is 'softening at a time when the export sector is taking a big hit,' Rajiv Biswas of IHS Markit said in a report. 'Chinese policymakers will therefore need to roll out further fiscal and monetary policy stimulus,' Biswas said.
 
April's growth in factory output hesitant to 5.4 percent over a year earlier from March's 8.5 percent growth, as stated by the National Bureau of Statistics.
 
Retail sales growth dropped to 7.2 percent over a year ago from the previous month's 8.7 percent. That is a setback for Chinese leaders who wish to promote self-sustaining economic growth based upon domestic consumption in the place of trade and investment.
 
Chinese economic growth held stable in the latest quarter at 6.4 percent over one year before. But that was supported by higher government spending and bank lending to reverse an economic slowdown. President Donald Trump's tariff hikes on Chinese imports have been hard on manufacturers. The escalating dispute also is unnerving Chinese consumers, depressing domestic demand.
 
Forecasters express a U.S. tariff increase on $200 billion of Chinese imports that took effect Friday could trim economic growth by 0.5 percentage points, stalling a recovery that looked to be gaining traction. They say the loss could increase to 1 percentage point if both sides extend penalties to all of each other's goods. That would push yearly growth under 6 percent, raising the risk of politically dangerous job losses.
 
'Policymakers are likely to step up stimulus again, mainly through pushing banks to make more loans and ramping up fiscal spending,' Macquarie Bank said in a report.
 
It alerted of 'rising volatility' in financial markets as a result of uncertainty about trade and economic growth. 'Things might have to get worse first to convince politicians to be realistic and get things done,' mentioned the report.
 
This article is originally posted on tronserve.com