BEIJING (Reuters) – China’s industrial output and retail sales growth accelerated more than expected in November, suggesting resilience in the economy as Beijing seeks to prop up domestic demand amid the trade war with the United States.
FILE PHOTO: Workers direct a crane lifting ductile iron pipes for export at a port in Lianyungang, Jiangsu province, China June 30, 2019. REUTERS/Stringer
Industrial production rose 6.2% year-on-year in November, data from the National Bureau of Statistics showed on Monday, beating the median forecast of 5.0% growth in a Reuters poll and quickening from 4.7% in October. It was also the fastest year-on-year growth in five months.
Factory indicators for November have shown surprising improvement in manufacturing, suggesting government support measures are helping domestic demand, even as exports and producer prices shrank.
Japanese construction machinery maker Komatsu Ltd (6301.T) said its machine usage hours in China rose for the first time in eight months in November, echoing trends seen in two manufacturing surveys.
The United States and China on Friday cooled their trade war, announcing a “Phase one” agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.
U.S. Trade Representative Robert Lighthizer on Sunday described the U.S.-China trade agreement as a “totally done” deal, notwithstanding some details.
However, despite recent glimmers or hope, analysts expect growth to slow further next year, with the government likely to set economic target at around 6% due to heightened uncertainties of global trade and more domestic headwinds that are set to weigh on growth.
Fixed asset investment showed no signs of improvement, after growing 5.2% from January-November, in line with a 5.2% rise in the first 10 months, which was the weakest pace in decades.
Private sector fixed-asset investment, which accounts for 60% of the country’s total investment, grew 4.5% in January-November.
China will keep economic policies stable while making them more effective in 2020 to help achieve its annual growth target, a top economics meeting said last week.
Betty Wang, senior China economist at ANZ, said policymakers are likely to rely on a combination of tools to maintain growth next year, rather than any single policy option.
Wang said in a note to clients on Friday accommodative policy was likely to be conducted in a less aggressive manner than what markets expect.
China’s economic growth cooled to 6.0% in the third quarter, a near 30-year low, but policymakers have been more cautious about growth boosting measures than in past downturns.
Retail sales rose 8.0% year-on-year in November, compared with an expected 7.6%, buoyed by the November Singles Day shopping extravaganza.
Reporting by Kevin Yao and Stella Qiu; Editing by Sam Holmes