China's factory output beats forecasts as Asia shakes off Covid slump

FE Team | Published: November 16, 2020 22:39:25

China's factory output rose faster-than-expected in October and retail sales sped up, as the recovery in the world's second-largest economy from its Covid-19 slump gathered momentum, reports Reuters.
Industrial production climbed 6.9 per cent in October from a year earlier, data from the National Statistics Bureau showed on Monday, in line with September's gain and faster than the 6.5 per cent rise expected in a Reuters poll of analysts.
The upbeat figures came as other Asian powerhouses also climbed out from their pandemic depths with Japan's economy reporting its fastest quarterly growth on record.
China's industrial sector has staged an impressive turnaround from the pandemic paralysis seen earlier this year, helped by resilient exports. Now, with the coronavirus largely under control in China, consumers are opening up their wallets again in a further boost to activity.
"The latest data suggest that the broad-based acceleration of China's economy continued in October," Julian Evans-Pritchard at Capital Economics said in a note.
"Policy stimulus continued to boost investment and industrial output while growth in real retail sales and services activity returned to pre-virus levels."
Across China, smelters and refineries ramped up production in October with aluminium and crude oil hitting record output levels as the reopened economy stoked demand.
Growth is expected to accelerate in the fourth quarter as the service sector recovery maintains momentum, Fu Linghui, spokesman of the National Statistics Bureau said, told reporters at a briefing.
In the consumer sector, retail sales rose 4.3 per cent on-year, missing forecasts for 4.9 per cent growth but still the fastest growth this year.
The improved appetite for spending was seen with China's auto sales growing 12.5 per cent in October, thanks to surging demand for electric vehicles.
Domestic tourism also saw a strong rebound over the Golden Week holiday last month, although levels were still well short of last year's.
Fixed-asset investment rose 1.8 per cent in January-October from the same period last year, compared with the 1.6 per cent growth forecast and a 0.8per cent increase in the first nine months of the year. China's consistent run of improving data since the second quarter and recent comments from officials have prompted speculation the central bank may start to tighten policy.