China industrial output accelerates as inflation eases
China's factory output and retail sales exceeded forecasts and inflation unexpectedly cooled to the slowest pace in 33 months, signaling the government is boosting growth without driving a rebound in prices.
Industrial production rose 9.6 percent in October from a year earlier, the National Bureau of Statistics said today in Beijing. That exceeded the 9.4 percent median estimate of analysts surveyed by Bloomberg News. Retail sales growth of 14.5 percent picked up from September's 14.2 percent. The consumer- price index increased 1.7 percent.
The Chinese flag flies ahead of the daily flag-lowering ceremony at Tiananmen Square in Beijing. Today's reports may offer some comfort to China's leaders who are meeting in Beijing this week for a once-a-decade power transition and pledged yesterday to double per-capita income in the 10 years through 2020. The pause in monetary easing since July may persist as data increasingly show the economy recovering from a seven-quarter slowdown.
"The key question for investors is whether China's economic growth has truly bottomed and is recovering," and the "answer is firmly yes," said Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong.
Government spending may be playing a key role in the pickup. Fixed-asset investment excluding rural areas increased 20.7 percent in the first 10 months of 2012 from a year earlier, compared with the 20.6 percent median analyst estimate and a 20.5 percent pace in the January-September period.
Spending on central gov- ernment-invested projects rose 5.1 percent in the 10-month period from a year earlier, more than double the JanuarySeptember pace, the data show.
The yuan was little changed against the dollar in Shanghai today. The benchmark Shanghai Composite Index of stocks fell for a fifth day, dropping 0.1 percent.
The increase in China's gross domestic product slowed to 7.4 percent in the JulySeptember period from a year earlier, the weakest in three years. Expansion will probably speed up to 7.7 percent this quarter and to 7.9 percent in the three months through March 2013, based on the median estimate of analysts surveyed Oct. 18-22. The increase in industrial output was the most in five months and compared with 9.2 percent in September. Retail sales growth was the highest since March.