Chinese industrial production rose 5.8 percent on the year in May, moderating from growth of 6.1 percent in April and just below the consensus forecast of 6.0 percent. In month-over-month terms, industrial production rose 0.61 percent in May after an increase of 0.22 percent in April.

Within the industrial sector, manufacturing output rose 6.2 percent on the year in May after increasing 6.6 percent in April. Utilities output and mining output rose 2.2 percent and 5.7 percent on the year respectively, little changed from previous increases of 2.1 percent and 5.7 percent respectively.

In their statement accompanying today's data, officials characterised the data as showing the economy maintained stability, with steady growth in production and demand. Officials again cited many unstable and uncertain factors in the external environment, reinforcing their urgency to develop domestic sources of demand in order to deliver a more sustainable economic recovery. Although they again pledged to implement more proactive and effective macro policies", officials provided no specific guidance about whether additional changes to policy settings will be considered in the near-term.

Activity data published today were mixed relative to consensus forecasts, with retail sales stronger and industrial production and fixed asset investment somewhat stronger. The China's RPI rose from minus 21 to minus 7 while the RPI-P rose from minus 30 to minus 10, indicating that recent Chinese data in sum are still coming in just below consensus forecasts.

Growth in industrial production is seen declining to 6.0 percent on year in May versus 6.1 percent in April.

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.