By Gina Lee
Investing.com – Chinese industrial output expanded for an eighth straight month in November, with economic recovery in the world’s second largest economy gathering pace as global demand increased.
Data released by the National Bureau of Statistics (NBS) earlier in the day showed that industrial production grew 7% year-on-year, against the 7% growth in forecasts prepared by Investing.com and slightly higher than October’s 6.9% growth. Retail sales grew 5% year-on-year, down from the forecast 5.2% growth but up from October’s 4.3% growth.
The unemployment rate was 5.2%, in line with forecasts but slightly down from October’s 5.3% rate.
Strong exports have been a key driver for the economy’s recovery from COVID-19-induced lockdowns in the first quarter of the year. Demand for medical equipment and work-from-home electronic devices have also boosted exports in recent months as many of China’s biggest markets tightened restrictive measures to curb increasing numbers of COVID-19 cases.
Some investors remained positive about the economic recovery.
The data points to fourth quarter growth that’s likely to be better than the previous three months, NBS spokesman Fu Linghui said after the data’s release. The retail recovery is on track and consumption will remain the main growth engine, he said, while also projecting “relatively fast” expansion in 2021.
The improvement in industrial production was “underpinned by robust domestic demand and very strong export … we expect the macro policy stance to shift from expansionary to contractionary, with the overall government deficit declining and monetary policy makers aiming to contain macro leverage,” Oxford Economics’ Louis Kuijs told Bloomberg.
Single’s Day events put on by e-commerce companies such as Alibaba (NYSE:BABA) in November also saw strong consumer sentiment and further boosted orders for small factories.
The accelerated recovery seen so far in the fourth quarter looks set to continue into 2021, aided by stronger demand, credit growth and stimulus measures.
However, the tighter restrictions implemented in some of China’s trading partners could create shipping bottle necks, in turn increasing transportation costs and capping the speed of China’s recovery.