China's main growth engines falter in October on trade frictions

Indicators showed other sectors also slowed significantly and missed forecasts with retail salesgrowthback near a 16-year trough and fixed asset investmentgrowththe weakest on record.

The disappointing numbers show China off to a rough start in the final three months of 2019 and will bolster calls for Beijing to roll out fresh support after third-quartergrowthslowed to its weakest in almost three decades, with factory production bruised by thetradewar with Washington.

Asian stocks fell after the soft data, which reinforced concerns thetradewar was hurting one of the world's major drivers of economicgrowth.

"These data support our view thatgrowthheadwinds remainstrong and the economy has yet to hit bottom," said Nomura in a note, adding that GDPgrowthis expected to slow to 5.8 per centin the fourth quarter from 6.0 per centin the third quarter.

Broad activity inChina'sfactory sector remained weak inOctoberwith producer prices falling at their fastest pace in more than three years and manufacturing activity mired in contraction for a six straight month, recent indicators showed.

Thursday's data showed the value of delivered industrial exports fell 3.8 per centon-year inOctober, marking the third straight month of declines.

China'ssteel output fell to a seven-month low inOctoberwhile the cement production contracted for the first time in over a year, compared with a year earlier.

The tariff war between China and the United States has hit global demand, disrupted supply chains and upended financial markets.

Other major trading powers have also felt the blow from the dispute with Japan's economy grinding to a near standstill in the third quarter, posting its weakestgrowthin a year.

While some signs of recent progress intradenegotiations between the superpowers have cheered financial market, officials from both sides have so far avoided any firm commitments to end their dispute.

That uncertainty has weighed persistently on manufacturers and their order books in recent months and raised doubts about the prospects of any breakthrough.

"Even if a minor deal is agreed upon in the coming months, this would merely allow the focus to shift to the more intractable issues that we think will eventually lead thetradetalks to break down," Capital Economics China Economist Martin Lynge Rasmussen said.

Fixed asset investment, a key driver of economicgrowth, rose just 5.2 per centfrom January-October, against expectedgrowthof 5.4 per centand the weakest pace since Reuters record began in 1996.

Infrastructure investment rose 4.2 per centin the first 10 months, slowing from a 4.5 per centgain in January-September.

In a bid to stop this trend,China'sState Council on Wednesday pledged to lower the minimum capital ratio requirement for some infrastructure investment projects.

At the same time, local governments are facing increasing fiscal strains as tax cuts and the broader slowdown reduce revenues, hampering the big infrastructure projects Beijing needs to revivegrowth.

Meanwhile,China'sproperty investment and salesgrowthboth eased to three-months low inOctober, suggesting a critical pillar of the economy is softening.

Retail sales rose 7.2 per centyear-on-year inOctober, missing expectedgrowthof 7.9 per centand matching the more than 16-year low hit in April.

Consumers have been hit with higher food prices over the past few months, as pork and other meat prices soared. ForOctober, they bought fewer garments, jewellery, automobiles from a year earlier.

To prop upgrowth,China'scentral bank this month cut the interest rate on its one-year medium-term lending facility loans, a key policy rate, for the first time since early 2016.

Analysts said the cut, while modest, maybe a sign the central bank is becoming more proactive and looking to ease worries that higher inflation will prevent it from delivering fresh stimulus.

"Economic performance still faces a fairly large number of risks and challenges and these cannot be underestimated. In the next stage, we will...continue to fully implement counter-cyclical adjustment policies," statistics bureau spokeswoman Liu Aihua told reporters in a briefing.

Earlier this week, Premier Li Keqiang flagged the need for the more effective use of economic support tools, such as "counter-cyclical adjustments" and local government special bonds.

In a front-page editorial on Thursday, the state-owned Securities Times said authorities should tolerate longer-term increases inChina'sdebt-to-gross domestic product ratio to allow for changing economic conditions.