Chinese economic data continues to impress

Photo by Tim Graham/Getty Images

China’s latest batch of economic data has impressed once again, continuing the theme seen earlier this month.

According to China’s National Bureau of Statistics (NBS), industrial output grew by 6.1% in the year to November, coming in slightly above forecasts for an increase of 6.0%.

While down on the 6.2% level reported in October, a steeper deceleration had been expected given recent restrictions on output introduced by regulators to help improve air quality in northern provinces during winter months.

Output in the mining sector fell by 1.7% year-on-year, offset by manufacturing output and the production and supply of electricity, heat, gas and water which increased by 6.8% and 4.5% respectively, according to the NBS.

“New growth drivers and new industries continued to develop,” said the NBS. “From January to November, the value added of high-tech industries and equipment manufacturing increased by 13.5% and 11.4 %respectively year-on-year.”

In the first ten months of the year, total industrial profits rose by 23.3% compared to the same period in 2016, partially reflecting government attempts to remove overcapcity in some industrial sectors.

“Remarkable progress was made in the work of cutting overcapacity, reducing excess inventory and lowering costs,” the NBS said. “The annual targets for cutting the overcapacity of steel and coal were [more than] fulfilled.”

Along with the small beat in industrial output, retail sales also accelerated slightly.

The NBS said they grew by 10.2% over the year, up from 10% in October. The result was in line with expectations.

Over the same period, online retail sales jumped by 32.4%, 6.2 percentage points higher than the same month a year earlier.

Like industrial output, urban fixed asset investment also decelerated sharply on the back of government restrictions, rising by 7.2% between January to November compared to the same period a year earlier.

That was down on the 7.3% annual increase reported in the first 10 months of the year but in line with economist forecasts.

Investment by government firms increased by 11.0% over the same period, outpacing growth in private investment which grew by a smaller 5.7%.

Private sector investment accounted for 60.5% of total investment in the first 11 months of the year.

Helping to explain the deceleration in the headline growth rate, total annual real estate investment grew by 7.5% between January to November, 0.3 percentage points lower than in the first ten months of the year.

“The national economy sustained the momentum of steady progress, with sound growth of production demand, stable employment and commodities prices, optimised economic structure and improved quality and efficiency,” the NBS said following the release of the data set.

Financial markets have shown little reaction to the figures.

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