China Industrial Output Growth Holds Steady in May; Up 6.5% On-Year

China's crude oil production fell to its lowest on record in May, even as refineries in the world's top buyer of crude churned out product at their fastest pace in almost two years, data showed on Wednesday.

Global concerns about China have increased since Moody's Investors Service downgraded its credit ratings in May. But some analysts expect increasingly stringent cooling measures will eventually drag on investment and dampen construction activity.

The growth of the private investment slowed to 6.8% in January-May period from 6.9% in the first four months, according to the National Bureau of Statistics.

Analysts polled by Reuters had predicted factory output would grow 6.3 percent in May, easing slightly from 6.5 percent in April.

During January to May, fixed asset investment increased 8.6 percent from the same period of the previous year, which was slower than the 8.8 percent growth economists had forecast and the 8.9 percent rise logged during the January to April period.

Consumption was relatively stronger in rural areas, with retail sales expanding 12.7 percent in May, outpacing urban areas, where retail sales climbed 10.4 percent year on year. Overall throughput was down from a record reached in March, but May recorded the fastest rate of year-on-year growth since May 2015.

Private sector investment accounts for around 60% of total investment in China. It had been expected to slip to 8.8 percent from 8.9 percent in Jan-April.

But some China watchers are more anxious about the risks of sharp slowdown in 2018.

Early warning indicators of a financial crisis were already flashing red, economists at Nomura said in a note this week, echoing the warnings of others such as the Bank for International Settlements (BIS).

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