• Wed
  • Aug 20, 2014
  • Updated: 1:23pm
BusinessEconomy
CHINA

China's economy shows added signs of recovery

Quicker growth in investments and industrial output reduces likelihood of aggressive policies

PUBLISHED : Monday, 10 December, 2012, 12:00am
UPDATED : Monday, 10 December, 2012, 3:32am

The mainland economy showed signs of further recovery last month as inflation remained subdued, reducing the likelihood that there will be forceful measures to bolster expansion.

Growth in industrial output accelerated to 10.1 per cent in November from a year earlier, while the consumer price index rose 2 per cent, the National Bureau of Statistics said yesterday.

The bureau's figures also showed investment remained robust and retail sales performed better than expected, reducing the odds that the new government would roll out aggressive measures to support growth when it takes office in March.

"GDP growth this year will be faster than 7.7 per cent," said Peng Wensheng, an economist at China International Capital Corp, at a forum yesterday. "I expect a small recovery next year, with GDP growth at around 8.1 per cent."

The Politburo said last week that the economy was stabilising and favourable factors were increasing. To date, economic growth has decelerated for seven consecutive quarters, with third-quarter GDP growth dipping to 7.4 per cent. The annual GDP target is 7.5 per cent this year.

"Next year, fiscal policy is expected to remain positive, with the government spending budget likely higher than this year, while monetary policy is likely to be neutral or slightly loose," Peng said.

Fixed-asset investments grew 20.7 per cent year-on-year in the first 11 months, on par with the January-October pace, according to the data.

By breakdown, growth in railway investments moderated to 16 per cent year-on-year last month, after surging 80 per cent in September and October. Growth in property investments quickened to 28.4 per cent, the fastest pace this year, while growth in manufacturing investments edged up to 20.2 per cent from 20.1 per cent in October.

Growth in planned investments in new projects, a leading indicator of fixed-asset investments, accelerated to 48.6 per cent from 35.2 per cent, suggesting growth in investments could remain steady in the coming months.

Nominal retail sales growth accelerated to 14.9 per cent from 14.5 per cent in October. After adjustment for inflation, real growth was 13.6 per cent.

Lu Ting, an economist at Bank of America-Merrill Lynch, said critics should now be convinced of the mainland's growth rebound. "The beloved power output growth data also jumped," he said.

Electricity output, an indicator widely believed is less easily manipulated, climbed 7.9 per cent year-on-year last month, compared with 6.4 per cent in October. Output growth of steel products, crude oil and non-ferrous metals also quickened.

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or