China in­dus­trial out­put ac­cel­er­ates as in­fla­tion eases

The Pak Banker - - Front Page -

BEI­JING

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.

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