China’s manufacturing sector slowed last month as strict measures to curb winter pollution forced factories to cut production, the latest sign of policymakers’ increasing willingness to sacrifice economic growth in favour of other priorities. Environmental inspections have prompted thousands of factory and mine closures across northern China. Hebei province, the center of the country’s steel industry, said in September it would cut production by as much as half in major cities.
“The resulting blue skies over Beijing have upended the conventional wisdom that local government officials would always put economic growth over the environment,” wrote Yanmei Xie, an analyst at Gavekal Dragonomics, a Beijing-based research company. Chinese factory output increased 6.1 percent in November year on year, its second-lowest reading since December 2016, the statistics bureau said on Thursday. Fixed-asset investment rose at its slowest annual pace in more than 20 years at 7.2 percent in the first 11 months of the year, although annual growth accelerated slightly in November compared with October.
At a five-yearly meeting of top Communist party leaders in October, policymakers signaled that they would shift away from pursuing expansion at all costs, focusing instead on high-quality growth. Mao Shengyong, the spokesman for the National Bureau of Statistics, told reporters on Thursday that strong economic growth provided a good opportunity to strengthen pollution controls. Top officials will meet in Beijing next week for the annual Economic Work Conference, where they will set policy priorities for 2018.