China’s economic recovery not nearly as weak as feared in October, but support needed to avoid ‘backsliding’
- Retail sales and industrial output exceeded expectations in October, but investments disappointed and the property sector remained a weak link
- Officials conceded ‘the foundation of the economic recovery still needs to be consolidated’, with policies set to remain supportive to aid the recovery
China’s mixed economic data in October pointed to an uneven and precarious recovery, with the world’s second-largest economy still in need of more supportive policies in the face of persistent headwinds.
Consumption and industrial activities exceeded market expectations last month, but investments disappointed again and the property sector remained a weak link.
But real estate investment fell by 9.3 per cent in the first 10 months compared with a year earlier, contracting further from the 9.1 per cent drop in the first three quarters, adding to the risk the property sector poses to China’s outlook.
Policy looks set to remain supportive, and possibly even stepped up to prevent the economy from backsliding
“The data suggests that the recovery was struggling to gain a strong footing at the start of the fourth quarter, but it was not nearly as weak as some had feared,” said analysts at Capital Economics.