Growth in China’s industrial and retail sectors beat expectations in November, as government support propped up demand in the world’s second-largest economy and amid easing trade hostilities with Washington.
The set of upbeat figures released on Monday follow firm signs of progress in Sino-US trade negotiations over the weekend after the world’s two largest economies announced a “phase one” trade deal that would nearly double US exports to China.
However, growth in infrastructure and the property sector, both key growth drivers, remained lacklustre in November, underlining key challenges for Beijing in its efforts to stabilise economic performance next year.
Industrial production rose 6.2 percent year-on-year in November, data from the National Bureau of Statistics showed, beating the median forecast of 5.0 percent growth in a Reuters poll and quickening from 4.7 percent in October. It was also the fastest year-on-year growth in five months.
“Activity and spending indicators strengthened across the board last month, though we think this uptick will prove short-lived,” said Martin Lynge Rasmussen, China Economist at Capital Economics.
“Admittedly, the phase-one US-China trade deal could boost both export activity and corporate investment in the near term. But real estate, a key prop to growth in recent quarters, is primed for a moderation as financing to the sector is being squeezed by a regulatory crackdown.”
Cement, crude steel and pig iron production all rose from a year earlier in November, compared with a fall in the previous month. Output growth in steel, auto and telecommunications sectors accelerated from October.