Chinese industrial production rose 5.6 percent on the year in April, up from an increase of 3.9 percent in March but falling short of the consensus forecast of 10.7 percent. This improvement in year-over-year growth partly reflects the base effects of weakness 12 months earlier when major cities, including Beijing and Shanghai, were subject to strict lockdowns in response to Covid-19 outbreaks. Manufacturing output rose 6.5 percent on the year in April, with mining and utilities output also rising at a solid pace.

In month-over-month terms, industrial production fell 0.47 percent in April after advancing 0.12 percent in March. PMI surveys also showed weaker conditions in both the manufacturing and services sectors in April, while inflation data showed price pressures remain weak.

Year-over-year growth in industrial production is expected to accelerate sharply to 10.7 percent in April versus growth of 3.9 percent in March.

Industrial production measures the change in the total inflation adjusted value of output produced by manufacturers, mines and utilities. Data are compared with the same month a year earlier.

Chinese data can have a broad impact on the currency markets due to China's dominant influence on the global economy and investor sentiment. It's a leading indicator of economic health. Production is the dominant driver of the economy and reacts quickly to ups and downs in the business cycle. No data are published in February for January.

The industrial growth rate is used to reflect a certain period of increase or decrease in volume of industrial production indicators. The indicator can be used to estimate the short term trend of the industrial economy, to judge the extent of the economic boom and also to be an important reference and basis for the formulation and adjustment of economic policies.