China factory output strengthens, investment up in sign of stabilising economy
BEIJING- China’s activity data was stronger than expected in November, with factory output growth picking up to a five-month high, signalling that a flurry of stimulus measures from Beijing may have put a floor under a fragile economy.
Factory output grew an annual 6.2 percent in November, the National Bureau of Statistics(NBS) showed, quickening from October’s 5.6 percent and beating expectations of 5.6 percent.
Growth in China’s fixed-asset investment, one of the main drivers of the economy, rose 10.2 percent in the first 11 months, unchanged from the gain in the January-October. Analysts had forecast a 10.1 percent rise in the January-November period.
Retail sales growth expanded at an annual 11.2 percent in November – the strongest expansion this year, compared with 11.0 percent in October. Analysts had forecast 11.1 percent growth in November.
“While low base could be the factor driving the headline growth, we still have to acknowledge that China’s data are illustrating signs of stabilization, albeit at a low level,” said Zhao Hao, senior economist at Commerzbank in Singapore,
The data came after weak trade and inflation readings earlier this week, which underscored the persistent slack in the economy.
The world’s second-biggest economy has been hit by weak demand at home and abroad, factory overcapacity and challenges posed by its transition to a consumption-led growth model from one reliant on investments.
Now with the U.S. Federal Reserve poised to raise interest rates for the first time in almost a decade at next week’s review, the risk of intensifying capital outflows has added to Beijing’s policy challenge.
Over the past year Chinese authorities have launched the most aggressive policy stimulus since the 2008/09 global financial crisis, including cutting interest rates six times since late 2014.
Premier Li Keqiang said earlier this month that China was on track to reach its economic growth target of about 7 percent this year, and the economy was going through adjustments to maintain reasonable medium- to long-term growth.
But that would still mark China’s weakest economic expansion in a quarter of a century, and some analysts believe real growth levels are much weaker than official data suggest. -Reuters