China’s Recovery Strengthens as Consumer Spending Gains
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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% in October from a year earlier, versus a median estimate for a 6.7% increase in a Bloomberg survey of economists. Retail sales expanded 4.3% in the period, higher than the 3.3% expansion in September, but missing the 5% projected increase. Fixed-asset investment grew 1.8% in the first 10 months of the year, versus a forecast 1.6% gain.
- The surveyed urban unemployment rate inched lower to 5.3%.
- 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 theSingles’ Day shopping festival in November. In the first 10 months of the year, retail sales were still down 5.9% 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% from a year ago, the first increase this year.
- 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 prioritize reforms over stimulus.”
- The central bank earlier Mondayinjected liquidity into the financial system and kept interest rates unchanged. Officials have recently raised the issue ofwithdrawing 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.
- For a breakdown of manufacturing output, clickhere.
- Copper pricesspiked toward $7,200 after the data.
— With assistance by James Mayger, Lin Zhu, and Enda Curran
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