Chinese industrial production surges in Nov, other data disappoints

  • Economic Indicators News
Chinese industrial production surges in Nov, other data disappoints
Credit: © Reuters. Chinese industrial production grew more than expected in November, indicating that manufacturing output remained steady even as local and overseas demand continued to trend lower. 

Industrial production grew 6.6% year-on-year in November, data from the National Bureau of Statistics showed on Friday. The reading was above expectations for growth of 5.6%, and accelerated from the 4.6% growth seen in the prior month. 

A major factor behind the stronger reading was a low basis for comparison, given that Chinese factories were still struggling with COVID-era lockdowns in late-2022. 

But the reading also indicated some resilience in output, offering some positive cues on the Chinese economy as a post-COVID economic rebound largely failed to materialize this year. 

China slid further into disinflation in November, while business activity remained weak, recent data prints showed. 

Local spending remained weak despite steady liquidity injections by Beijing. The People’s Bank of China  injected 1.45 trillion yuan ($200 billion) into the economy through its medium-term lending facility on Friday. 

But other data released on Friday showed that large swathes of the Chinese economy remained under pressure. Retail sales grew 10.1% year-on-year in November, but missed expectations for growth of 12.5%. 

While retail sales have risen steadily from the prior year, they have still remained relatively weak, with discretionary spending falling sharply as consumers turned even more cautious over China’s economic prospects. 

China’s unemployment rate remained steady at 5%.

Fixed asset investment grew 2.9%, missing expectations of 3% as investors remained wary of making big capital investments in the country. Foreign capital flows into China in particular have dried up this year amid sluggish economic growth. 

Persistent weakness in the Chinese economy has drawn increasing calls for more targeted, fiscal measures from the Chinese government. A flailing property sector, in the wake of several high-profile defaults, has also presented more headwinds to the country. 

Ratings agency Moody’s recently cut its outlook on China to Negative, and flagged a potential downgrade to the country’s credit rating. 

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