China's October economic data good news for leaders as plenum starts
Data including faster industrial output growth and below-target inflation suggests strength
Growth in mainland industrial output unexpectedly accelerated last month and inflation stayed below a government target, providing a boost to Communist Party leaders who began a crucial meeting yesterday in Beijing to chart the economy's course for coming years.
Production rose 10.3 per cent from a year earlier, the National Bureau of Statistics said. Inflation was a less-than-forecast 3.2 per cent and producer prices fell 1.5 per cent.
The data, released a day after news of an unexpectedly large jump in exports, adds to a picture of an economy that is gaining strength. The improvements may bolster the confidence of President Xi Jinping and Premier Li Keqiang as they wrestle with the scale and pace of reform at the four-day third plenum of the party's Central Committee.
"The recovery momentum is slightly stronger and more sustainable than what markets had expected and inflation is still not a threat," said Lu Ting, head of Greater China economics at Bank of America Merrill Lynch. The central bank will not "significantly tighten monetary policies as new leaders still need a stable economic and financial environment to consolidate their power base", he said.
Lu said he saw "slightly more upside risk" to his fourth-quarter economic-growth estimate of 7.7 per cent and forecasts the increase in gross domestic product in the first half of next year could be close to 8 per cent.
GDP growth rebounded to 7.8 per cent in the third quarter from 7.5 per cent in the previous three months.
"The government has managed to deliver stable economic data leading into the plenum driven by policy easing as evidenced by a sharp rise in total social financing" in recent months, Zhang Zhiwei, chief China economist at Nomura in Hong Kong, said in a note.
"As GDP growth is on track to achieve the 7.5 per cent target for 2013, the political pressure to deliver good macro numbers will lessen."
The People's Bank of China will report October money supply, new loans and aggregate financing, its broadest measure of credit, this week.
October's retail sales growth of 13.3 per cent compared with the median projection for a 13.4 per cent advance.
Industrial output gains have exceeded 10 per cent in each of the past three months, the longest stretch since the end of 2011, excluding January and February distortions caused by the timing of the Lunar New Year holiday.
The increase in October's consumer price index was the highest since February, when the index also rose 3.2 per cent.