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Mixed growth picture emerges after new data

Publication Date : 11-12-2013

 

China's industrial output and investment growth cooled in November while retail sales unexpectedly picked up, presenting a mixed growth picture.

The output from industrial enterprises with annual sales of more than 20 million yuan (US$3.29 million) rose 10 per cent from a year earlier, a fall from October's 10.3 per cent year-on-year growth, according to data released by the National Bureau of Statistics on Tuesday.

The growth rate is lower than projections by various financial institutions.

Electricity output, a key indicator to gauge the vitality of industrial activities, fell to 6.8 per cent year-on-year growth from 8.4 per cent a month ago.

Meanwhile, China's urban fixed-asset investment growth cooled to 19.9 per cent year-on-year in the January to November period, down 0.2 percentage point from the growth rate in the first 10 months. It is the lowest point for the whole year.

"The November industrial output and investment data showed a modest softening in the economy. The process may remain in the coming quarters," said Chang Jian, a senior Barclays Capital economist.

"In the fourth quarter, we expected GDP growth to be relatively stable at 7.6 per cent, compared with 7.8 per cent in the third quarter," she added.

While investment growth in the manufacturing sector fell by 0.5 percentage point compared with the January to October period, property investment heated up, defying the latest property purchase restriction measures taken in some cities.

The property sector attracted 7.74 trillion yuan of investment in the first 11 months, up 19.5 per cent year-on-year. The growth rate is 0.3 percentage point higher than that of the first 10 months.

The value of homes sold in November rose 19 per cent to 720.4 billion yuan, the highest since December 2011, from 604.8 billion yuan in October, according to the difference between the NBS' data for the first 11 months and first 10.

"The data surprised the market and showed that housing demand in China is still very strong," said Dai Fang, a Shanghai-based property analyst at Zheshang Securities Co. "Raising the minimum down payment is not working effectively."

Retail sales were a high point among a slew of November data released by the National Bureau of Statistics. They advanced 13.7 per cent over a year earlier, up from the 13.3 per cent year-on-year growth in October.

China's retail sales will grow by more than 13 per cent year-on-year for 2013, Commerce Minister Gao Hucheng said on Monday. The expected figure is lower than last year's 14.3 per cent nominal growth.

Fan Jianping, chief economist at the State Information Center, said consumption growth is likely to be slower in 2014 amid weak market demand - and that may contribute less to the GDP figure. Investment growth may also slow to 17 per cent next year because the financing cost may continue to rise under the high borrowing interest rate.

 

 

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