Explainer | China’s economic recovery ‘slowly moving in a positive direction’: 7 takeaways from October’s data
- China’s retail sales rose by 7.6 per cent in October, year on year, but real estate investment fell by 9.3 per cent in the first 10 months of the year
- Fixed-asset investment expanded by 2.9 per cent in the first 10 months of the year, while industrial output rose by 4.6 per cent in October
1. Retail sales ‘particularly strong’, but scepticism remains
“The October activity data showed an ongoing recovery which was led by consumption,” said analysts at HSBC.
Analysts at Capital Economics pointed to a low base for comparison as many cities in China went into lockdown a year ago, although they said the recovery in sales continued to gain momentum, reflecting an improvement in consumer confidence.
The breakdown showed that the gains were concentrated in online goods purchases, they added.
“Retail sales in October was particularly strong, beating even our above-consensus estimates given sharp increases in holiday-related spending components including catering, tobacco and alcohol, sports and entertainment, and communication equipment,” Louise Loo, lead economist at Oxford Economics.
Loo added that the momentum may persist going into the first quarter of next year, but she remained sceptical of a permanent upshift in consumer spending despite three consecutive months of strong retail sales data.