China says output, retail sales accelerate in November

China says output, retail sales accelerate in November

China's industrial output and retail sales growth both accelerated in November, government data showed on Tuesday (Dec 13), in a sign of stabilisation for the world's second-largest economy.

China textile factory

BEIJING: China's industrial output and retail sales growth both accelerated in November, government data showed on Tuesday (Dec 13), in a sign of stabilisation for the world's second-largest economy.

Industrial output rose 6.2 per cent in the month, ahead of both October's figures and economists' predictions of 6.1 per cent in a Bloomberg News survey.

Retail sales rose 10.8 per cent on-year in nominal terms, up from 10.0 per cent in October, while fixed-asset investment, a gauge of infrastructure spending, rose 8.3 per cent in the first 11 months of the year, the National Bureau of Statistics (NBS) said.

China is a key driver of the world economy but its expansion has slowed significantly from the double-digit years of the past.

Now Beijing is seeking to make a difficult transition away from its dependence on exports and heavy industry towards consumption as the engine of the economy.

After a bumpy start to the year, it has shown resilience in the last quarter, aided by ample credit policies and the weakening of the yuan currency, making Chinese goods cheaper to buy for overseas customers.

Total retail sales reached 3.1 trillion yuan (US$450 billion) in the month, boosted by the annual "Singles Day" online sales promotions for Nov 11.

Sales of household electrical appliances, office goods, communication devices and automobiles were particularly strong.

Utilities and auto sales came in stronger than expected in the month, as growth shifted towards industry and away from construction and services last month, IHS Global Insight analysts said in a note.

TRUMP UNCERTAINTY

Together the data show that China's recovery "remains intact heading into 2017", Julian Evans-Pritchard of Capital Economics said in a note.

But as credit growth has cooled and the red-hot property sector faces a correction, the economy is likely to begin slowing again next year, he added.

The recovery has been driven by state-owned enterprises, suggesting that the government and SOEs are taking up a larger share of the economy, Zhao Yang of Nomura said.

Recent curbs on buying real estate led to a slight slowdown in property investment and sales that will continue to kick in, "adding downward pressures" in coming months, he noted.

And the outlook for China's performance is clouded by uncertainty over the coming US presidency of Donald Trump, who has promised to declare China a currency manipulator and threatened to slap 45 per cent punitive tariffs on imports from the country to protect American jobs.

In an interview broadcast on Sunday, Trump doubled down on tough rhetoric towards Beijing, saying he did not see why the US must "be bound by a one China policy unless we make a deal with China having to do with other things, including trade".

In a statement, NBS analyst Mao Shengyong described economic development as "steady and sound" in November, citing factors including supply-side structural reform, stimulus policies and improved factory efficiency.

But he added: "We should be aware that domestic and external conditions are still complicated with a number of unstable and uncertain factors."

Investors welcomed the stronger-than-expected results, with Chinese stocks ending slightly higher on Tuesday.

The benchmark Shanghai Composite Index closed up 0.07 per cent to 3,155.04.

Source: AFP/ec

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