China, India put chill on recovery with gloomy data

SHANGHAI – Dismal data from China and India on Friday may signal a further weakening of the global recovery, undermining hopes the dynamic emerging economies of Asia can help prop up growth.

China reported its industrial production rose 9.3 percent from a year earlier in April, below expectations and down from nearly 12 percent in March. Investment and retail sales also slowed, though easing inflation offers leeway for fresh moves to boost growth.

India’s industrial output fell 3.5 percent in March from a year earlier on weak manufacturing and investment. Output for the fiscal year ending in March rose 2.8 percent, down from 8.2 percent the year before.

The anemic indicators suggest Asia’s ability to counter slowing growth in Europe may be limited. It also shows that the brief burst of vitality partly fueled by European stimulus late last year is likely wearing off.

“It’s possible we’re seeing the tailwind fall out of that,” said Tony Nash, managing director at IHS Global Insight in Singapore. “We’ve been looking for more easing. It might start any time given these numbers.”

The figures come a day after China announced that its trade surplus widened in April as imports barely budged, sharpening fears the economy is not doing enough to stimulate domestic demand and counter a slowdown. Already, commodity prices are falling as China’s slowdown bites into demand for oil, industrial components and consumer goods at a time when U.S. and European growth are weak.

Friday’s data are especially troubling because they indicate weakening domestic demand in India and China, markets many had looked to hopefully as bastions of growth in the faltering global economy.

“Things look very shaky in Europe and the U.S. economy is decelerating. The last thing we need is for the emerging world to downshift. Unfortunately the data today points in that direction,” said Frederic Neumann, co-head of Asian economics research at HSBC in Hong Kong.

“We fear that without further stimulus India and China will continue to slow,” he said.

Hong Kong reported Friday that its first-quarter economic growth stalled, expanding only 0.4 percent, as exports shrank. The government of the southern Chinese financial center warned Friday of further risks from the European debt crisis.