On Wednesday, China’s official data showed that industrial output and retail sales growth exceeded expectations in October, while the overall Chinese economy remains weak, particularly in the property sector, which has long been hit by a crisis.
The second-largest global economy has struggled to achieve a robust recovery after COVID-19, and the property sector has weighed on sentiment.
China’s industrial output expanded by 4.6% in October compared to the same period last year, showing an acceleration from the 4.5% rate observed in September. This surpassed expectations for a 4.4% increase, as indicated in a Reuters poll, representing the strongest growth since April.
London’s largest listed miners rallied on the news Chinese industry was set to provide support for commodities in the coming months.
Retail sales experienced a 7.6% increase in October, showing improvement in both restaurant and auto sales growth. The Chinese government has taken steps to realign the economy towards the consumer, and the numbers will validate their approach.
According to Susannah Streeter, head of money and markets, Hargreaves Lansdown, ”There are some glimmers of hope emerging from the latest economic data out today, with industrial production at a 4-month high, rising 4.6% in October, beating forecasts of 4.4%.”
She added that “efforts to try and stimulate consumer demand finally appear to be paying off, with retail sales accelerating to 7.6% year-on-year in October, again surpassing expectations. This is encouraging, but it’s still set to be a slog to sustainably restore more buoyant growth, so any hints of rapprochement in terms of China/US trade will be well received.’