China's recovery strengthens as consumer spending gains
[BEIJING] China's economic recovery strengthened in October, with consumer spending picking up steadily and industrial production and investment rising faster than expected.
Industrial output rose 6.9 per cent in October from a year earlier, versus a median estimate for a 6.7 per cent increase. Retail sales expanded 4.3 per cent in the period, compared to a projected 5 per cent rise. Fixed-asset investment grew 1.8 per cent in the first 10 months of the year, versus a forecast 1.6 per cent increase.
The surveyed urban unemployment rate inched lower to 5.3 per cent.
Key Insights The data shows China's recovery is well on track, supported by stimulus policies, strong export demand, and a virus outbreak that's under control. Consumer spending is also catching up quickly after a slow start, complementing the industrial-led recovery.
Retail spending received a boost from the golden week holiday last month, though many shoppers also delayed purchases to take advantage of the Singles' Day shopping festival in November. In the first 10 months of the year, retail sales were still down 5.9 per cent from the same period in 2019.
The recovery continued to broaden out in October, Fu Linghui, a spokesman for the National Bureau of Statistics, told reporters in Beijing. Catering revenue rose 0.8 per cent from a year ago, the first increase this year.
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China continues to move closer to its potential growth, said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group. "As the growth outlook remains positive, the authorities will prioritise reforms over stimulus." The central bank earlier Monday injected liquidity into the financial system and kept interest rates unchanged. Officials have recently raised the issue of withdrawing stimulus, although they have said any adjustment shouldn't be rushed.
By and large the growth momentum appears to remain on track, Julia Wang, a global market strategist at JPMorgan Chase & Co told Bloomberg Television. She also said the broad recovery in consumer confidence is continuing, based on indicators around the public holiday spending and on domestic tourism.
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