China’s industrial output in the first two months of 2016 expanded at its slowest rate since the global financial crisis of 2008 as it battles to effect a troublesome transition from export-led growth model to one biased more heavily towards domestic consumption.

According to official data, output at China’s factories and mines increased by just 5.4% in January and February compared with the same two months in 2015. There was little in the way of a counter-balance to be found from retail sales, which jumped 10.2% in the same period, less than estimates for a 10.9% increase.

Despite the somber outlook, chief market strategist at Mizuho Financial Global thinks that markets are too focused on the perception of China’s slowing factory output being negative. “This is precisely what’s supposed to happen when an economy tries to rebalance. Retail sales of 10.2% would be greeted with euphoria in the West yet it’s considered derisory because it’s China,” he noted.

China’s stock markets have been the subject of considerable focus since the volatility that wiped $5 trillion off the value of the two main exchanges, the Shanghai and Shenzhen Composites in the summer of 2015. The volatility returned in January with sharp falls that prompted ill-fated interventions by the central bank in an effort to prop up prices.

“China’s regulator doesn’t seem to be done with intervention yet,” said the Mizuho Financial Global analyst alluding to comments made by newly-appointed Chairman of the CSRC (China Securities Regulatory Commission) Liu Shiyu who said the state would intervene “if the market is not working at all or continues to fall”.

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