Chinese industrial production rose 5.6 percent on the year in May, moderating from growth of 6.7 percent in April. In month-over-month terms, industrial production rose 0.30 percent in May after increasing 0.97 percent in April.

Within the industrial sector, manufacturing output rose 6.0 percent on the year in May after increasing 7.5 percent in April. Utilities output and mining output rose 4.3 percent and 3.6 percent on the year respectively after increasing 5.8 percent and 2.0 percent respectively in April.

Officials characterised monthly data published today as showing that the national economy"sustained the recovery momentum with stable growth" with"improvement in major indicators and rapid development of new growth drivers". Officials also again warned, however, that"the external environment is complex and severe" and that the domestic economy still faces"multiple difficulties and challenges". They again noted that they will seek to"frontload and effectively implement" macroeconomic policies that have already been introduced, suggesting that they do not yet see a case for a major shift in policy settings.
 
Monthly activity data published today were mixed relative to consensus expectations, with industrial production growth falling short of the consensus forecast for year-over-year growth of 6.2 percent. China's RPI rose from zero to plus 7 and the RPI-P rose from zero to plus 10, indicating that recent Chinese data in sum are continuing to come in slightly on the high side of consensus ranges.

Year-over-year growth in industrial production rose a stronger-than-expected 6.7 percent in April after 4.5 percent growth in March. Expectations for May is 6.2 percent growth.

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.