China Beige Book signals limits in rebound

China's economic rebound is uneven, with improvements in retailing, real estate and mining countered by rising inventories and lower corporate borrowing, according to a report modelled on the US Federal Reserve's Beige Book.

While shopping outlets and services companies are optimistic, credit conditions signal "this is not yet a period of strong expansion", CBB International, a New York-based researcher, said in an e-mailed summary of its China Beige Book.

The new Communist Party leadership aims to sustain the expansion of the world's second-biggest economy without fuelling property-price gains or adding to banks' bad-loan risks.

The World Bank says growth may be as much as 8.4 per cent next year after a likely 7.9 per cent expansion in 2012, set to be the weakest pace since 1999.

"The economy as a whole saw an uneven rebound in the fourth quarter, driven by strength in retail, real estate, mining and to a lesser extent, manufacturing," said Leland Miller, New York-based president of China Beige Book International.

"But serious structural issues remain, including expanding manufacturing and mining inventories and credit-easing policies that continue to yield increasingly diminished returns."