China sees strong industrial, retail growth in November

Chinese consumers spent US$38.3 bil on Singles’ Day. (AP pic)

BEIJING: China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, data showed Monday, providing a further boost to Beijing after finally agreeing a mini trade pact with the United States last week.

The readings come at the end of a tough year for the world’s number two economy, which is expanding at its weakest rate for three decades as it is buffeted by the long-running trade war with Washington as well as a slowdown in global demand for its goods.

Industrial production increased 6.2% on-year last month, up from 4.7% in October and the best reading in six months.

There was also positive news for the country’s shops, with retail sales up 8.0%, compared with a 7.2% rise the month before.

The figures exceeded expectations, with analysts surveyed by Bloomberg predicting just 5.0% growth in industrial production and 7.6% in retail sales.

Fu Linghui, spokesman at the National Bureau of Statistics, said the key economic indicators “performed better than expected” in the “face of mounting risks and challenges both at home and abroad”.

But he warned there was still “downward pressure” on the Chinese economy owing to “increasing external instabilities and uncertainties”.

Investment in fixed capital was up 5.2%, the same as October and in line with predictions.

In November, Chinese shoppers set new records for spending during the annual “Singles’ Day” buying spree, with e-commerce giant Alibaba saying consumers spent US$38.3 billion on its platforms during the world’s biggest 24-hour shopping event.

The figure was up 26% from the previous all-time high set last year.

China’s economy is in an extended slowdown and the Singles’ Day fire sale is viewed as a snapshot of consumer sentiment.

Economic growth slowed to 6% in the third quarter – the most sluggish rate since 1990 – as demand for exports cooled and Chinese consumers tightened their belts.

Fu said Beijing was on track to meet its full-year growth target of 6.0-6.5%for 2019, but “must also acknowledge that the current international environment is still relatively complicated”.

The partial trade deal had “reduced market uncertainty”, he said.

But analysts said Monday’s strong data was not necessarily a sign of long-lasting growth.

“We think this uptick will prove short-lived,” said Martin Lynge Rasmussen, China economist at Capital Economics, warning of the impact of a squeeze on financing in the important real-estate sector.

“Downward pressure on growth is likely to resurface before long,” he added.