China's industrial output slowed during the first two months of the year as unemployment rose, official data showed today.
The figures from the National Bureau of Statistics come as Beijing and Washington appear to be nearing a deal to resolve their painful trade spat, and Chinese leaders convene in the capital for an annual parliamentary session.
Output growth at China's factories and workshops for the first two months slowed to 5.3% year-on-year, from 5.7% in December, a multi-year low and short of forecasts.
China's normally steady unemployment rate rose to 5.3% in February, from 4.9% in December, with the NBS saying it had expected worse numbers.
Chinese Premier Li Keqiang last week laid out a lower growth target of 6-6.5% this year, from 6.6% growth in 2018, which was already the slowest pace for almost three decades.
Policymakers in Beijing have talked up plans to support the economy, announcing tax cuts, fee reductions, and financing support.
A plan to cut value-added tax for manufacturers will help the struggling sector.
In January and February car sales continued to fall and manufacturing activity sunk.
The latest data showed growth in retail sales for January-February remained flat from December, rising 8.2% year-on-year and slightly above forecasts from economists polled by Bloomberg News.
However, retail sales remain near a 15-year low, said Julian Evans-Pritchard of Capital Economics in a note, adding that "the near-term outlook still looks downbeat".
Beijing is counting on consumers and renewed investment to stabilise the economy.
Fixed-asset investment rose 6.1% in the first two months, from 5.9% in 2018.
Last year investment in infrastructure crumbled as China hit the brakes on major projects such as subway lines and motorways to keep a lid on debt.
Beijing has tried to restart spending. Infrastructure spending ticked up 4.3% in January and February, from 3.8% the same time last year.
But it still remains well below the near 20% growth seen for many years.
China is grappling with a decline in global demand – most notably from the US, which launched a trade war last year.
US President Donald Trump said yesterday he sees a "very good chance" of reaching a trade deal with China but is in "no rush" to reach an agreement.
The two sides have exchanged tariffs on more than $360 billion in two-way trade, and China's exports and imports plummeted much more than expected in February.
The slowdown has stalled price growth in the country's industrial sector while consumer inflation has eased.