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China Nov factory output, retail sales stronger than expected
December 13, 2016 / 2:21 AM / 9 months ago

China Nov factory output, retail sales stronger than expected

Men work in the Tianye Tolian Heavy Industry Co. factory in Qinhuangdao in the QHD economic development zone, Hebei province, China December 2, 2016. REUTERS/Thomas Peter - RTSUDT1

BEIJING (Reuters) - China’s factory output and retail sales grew faster than expected in November, while fixed-asset investment was in-line with forecasts, adding to growing signs of stabilisation in the world’s second-biggest economy.

Factory output grew 6.2 percent from a year earlier, slightly better than analysts’ forecasts and October’s reading.

Retail sales climbed 10.8 percent, the fastest pace since December 2015 and beating expectations for a 10.1 percent rise.

After a rocky start to the year, China’s economy has performed better than expected and looks set to hit Beijing’s 6.5 to 7 percent growth target as increased government spending and a sizzling housing market spur a construction boom.

Private investment remains weak, however, leaving economic growth more reliant on a steady stream of government spending, while the property market is showing signs of fatigue, raising fears that this year’s momentum will not be sustainable.

Growth of fixed asset investment was unchanged at 8.3 percent in January-November from the same period a year earlier, the National Bureau of Statistics said on Tuesday.

That was in-line with analysts’ estimates and the same pace as in the first 10 months of the year.

Fixed-asset investment by state firms rose 20.2 percent in January-November, easing from 20.5 percent in the first 10 months.

Growth of private investment picked up to 3.1 percent from 2.9 percent in January-October, suggesting an improved appetite from private firms to invest though still at low levels compared with previous years.

Private investment accounted for 61.5 percent of fixed asset investment in the Jan-Nov period, the stats bureau said.

Chinese policymakers have been trying to lure private investors into big infrastructure projects through public-private partnerships, but many lucrative sectors are still dominated by state firms.

Retail sales were buoyed by gains in auto sales, home appliances and cosmetics.

Auto sales in China surged for a sixth consecutive month in November, an industry association said on Monday, as consumers rushed to buy cars amid uncertainty over whether a tax incentive will be extended beyond the end of the year.

Alibaba Group Holding Ltd (BABA.N) Singles’ Day festival on Nov. 11 posted a record 120.7 billion yuan ($17.73 billion) worth of sales, though the gala shopping day saw growth slow as Chinese shoppers searched for deeper discounts and lower price tags.

Last week, trade data showed China’s imports grew at the fastest pace in more than two years in November, while exports also rose unexpectedly, reflecting a pick-up in both domestic and global demand.

The statistics bureau said in comments with the data that China’s economy showed positive changes in November but still faces uncertainties at home and abroad.

China’s property sales growth slowed sharply to 7.9 percent in November from a year earlier, its lowest November 2015, and well short of a 26.4 percent increase in October.

Reporting by Kevin Yao; Editing by Kim Coghill

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