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China industrial production beats expectations in Oct, retail sales rise

Published 15/11/2023, 01:18 pm
Updated 15/11/2023, 01:18 pm
© Reuters.

Investing.com-- Chinese industrial production grew more than expected in October, while retail sales also rose past expectations as continued stimulus measures from Beijing appeared to be boosting local demand to some degree. 

Industrial production grew 4.3% in October from the prior year, data from the National Bureau of Statistics showed on Wednesday. The reading was more than expectations of 4.3%, and improved slightly from the 4.5% seen in September. 

A bulk of the improvement was fueled chiefly by increasing local consumption, which in turn was supported by several liquidity measures undertaken by the government over the past quarter. 

Year-to-date industrial production grew 4.1%, improving slightly from the 4.0% seen in September. 

But growth in production was stymied by weak overseas demand, as economic conditions in China’s biggest export destinations worsened substantially this year. This saw most factories cut output in the face of declining orders.

Other indicators for October, released over the past two weeks, showed that Chinese manufacturing and services activity fared much worse than expected during the month. 

This also kept investors and businesses wary of betting big, with a separate reading showing that fixed asset investment grew less than expected in October, up 2.9% against expectations for a rise of 3.1%. 

But Chinese retail sales picked up pace in October, boosted largely by the Golden Week holiday at the beginning of the month. Retail sales grew 7.6%, beating expectations for a rise of 7.0% and accelerating from the 5.5% seen in the prior month. 

China’s unemployment rate remained steady at 5%, as expected.

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Wednesday’s readings highlight some resilience in the Chinese economy, as Beijing struggles to shore up growth in the wake of the COVID-19 pandemic. 

But an overall economic recovery in the country remained tenuous, especially as business activity readings for October still pointed to sustained weakness. 

Beijing is expected to ramp up its stimulus efforts in the fourth quarter, especially with a massive 1 trillion yuan bond issuance on the cards. But the Chinese economy still faces headwinds from worsening international demand. 

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