China October industrial output rises by 10.3%

By Kelly Olsen ,AFP

BEIJING — China’s industrial output accelerated in October, retail sales showed a solid gain, and inflation was stable as the world’s second-largest economy showed early signs of fourth-quarter strength. The 10.3 percent year-on-year gain in production at China’s factories, workshops and mines announced by the National Bureau of Statistics (NBS) marks a marginal acceleration from September, when the indicator showed an increase of 10.2 percent. It was also stronger than analyst expectations, exceeding the median forecast of 10.0 percent in a poll of 13 economists by The Wall Street Journal, as reported by Dow Jones Newswires. Retail sales, a key indicator for consumer spending, gained 13.3 percent in October from the same month the year before, the NBS said, the same result as September. China’s consumer price index (CPI), meanwhile, accelerated slightly to 3.2 percent in October from the same month last year, led by higher food prices, after rising 3.1 percent in September, the NBS said. The data show that “growth momentum in October was quite solid” and “the recovery momentum is slightly stronger and more sustainable than what markets had expected,” economists at Bank of America Merrill Lynch said in a report, adding that “inflation is still not a threat.” China’s exports, meanwhile, grew 5.6 percent year-on-year in October to US$185.4 billion, reversing a 0.3-percent fall in September, the General Administration of Customs announced Friday. October’s data results have added to evidence the country’s economy is picking up, and will likely be welcomed by China’s ruling Communist Party, which on Saturday kicked off a closely watched four-day meeting focused on economic reform. The gathering, known as the Third Plenum, has traditionally set the economic tone for a new government, and comes a year after China embarked on a once-a-decade leadership transition that was completed in March. China’s economy — a key driver of regional and global growth — expanded 7.8 percent in the three months from July to September, the NBS announced last month, snapping a two-quarter slowdown. The country’s leaders say they want to retool its economic model away from a reliance on big ticket government-led investments and make private, such as consumer, spending the key driver for what they hope will be more moderate yet sustainable expansions. Also Saturday, fixed asset investment, a measure of government spending on infrastructure, rose 20.1 percent during the first 10 months of this year from the same period in 2012, the NBS said.

That marked a slight slowdown, however, as the indicator had increased by 20.2 percent during the first nine months of this year. A gain in food prices, which were 6.5 percent higher than the year before, was the main driver for October’s CPI, the NBS data showed.

Inflation for the first 10 months of the year through October came in at 2.6 percent, well below the government’s full-year target of 3.5 percent. “The consumer price index as a whole maintained stability,” NBS analyst Yu Qiumei said in a statement. ANZ bank economists Liu Li-Gang and Zhou Hao said that the data show inflation remains under control. “While the CPI inflation is likely to exceed 3 percent again in November, the whole year inflation will be around 2.7 percent, well below the control target of 3.5 percent,” they wrote in an analysis.