BEIJING: China’s industrial production surprised over the weekend with its best showing since June, the latest indication that government stimulus measures may be driving a mild recovery in the world’s second largest economy.
Output at factories, workshops and mines increased 6.2 percent last month from a year ago, the National Bureau of Statistics (NBS) said, the first increase since August and a significant jump from October’s figure of 5.6 percent.
The figures, which came on robust production of automobiles, synthetic fibres and non-ferrous metals, were higher than the 5.7 percent increase forecasted by economists in a survey by Bloomberg News.
Accompanied by higher than expected numbers for retail sales, the figures cap off a good week for economic data from China, a leading engine of global expansion whose slowing growth has raised concerns in world markets.
Authorities are trying to transform the country’s growth model to a slower but more sustainable one driven by consumption rather than infrastructure investment, but the transition to the “new normal” is proving bumpy.
Overcapacity in manufacturing, a slowdown in the country’s property market and mounting local government debt are among the factors that have weighed on growth.
But the country is working towards “a phasing out of the old economy and a phasing in of the new economy,” Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong, told Bloomberg News ahead of the announcement.
Saturday’s data was suggestive of what such a transition might look like.
Retail sales rose 11.2 percent in November to their highest level this year, the data showed, after last month’s “Single’s Day” generated more than $14 billion in sales.
The November 11 national online shopping festival has evolved into the globe’s biggest since e-commerce giant Alibaba began using the date in 2009 to promote sales through its platforms.
The more than $14 billion worth of merchandise volume this year smashed through last year’s tally of $9.3 billion, according to figures provided by the company.
Online sales increased by 34.5 percent during the period from January to November, the data from the NBS showed.
While consumer sales figures grew, fixed asset investment remained moribund, increasing 10.2 percent in the period from January to November, the same pace as was reported in October, according to the statistics.
‘Stopped from slipping’
Saturday’s announcement followed good news for car sales and bank lending earlier in the week, increasing perceptions that government stimulus measures are taking hold.
Beijing has implemented six interest rate cuts since November last year and cut vehicle purchase taxes earlier this year.
And on Friday, the country’s central bank signalled it may loosen the yuan’s peg to the US dollar, measuring it instead against a basket of currencies of its major trading partners.
“China’s economy is stabilising, and has stopped from slipping,” Shen Jianguang, chief Asia economist at Mizuki Securities in Hong Kong, told Blomberg News.
“We’re going to see clearer improvements in the next few months as the government keeps cutting interest rates and reserve requirements as well as adopting more proactive fiscal policies.”