adminBeijing. — China’s industrial output rose less than estimated in November while retail sales unexpectedly accelerated, giving a mixed picture of growth as leaders gather in Beijing to set economic policies for the coming year. Factory production rose 10 percent from a year earlier, the National Bureau of Statistics said in Beijing yesterday, compared with analysts’ median projection of 10,1 percent in a Bloomberg survey. Retail sales advanced 13,7 percent.
Yesterday’s data may complicate efforts by leaders of the world’s second-largest economy to implement reforms that pose short-term growth risks, including loosening control on interest rates.
Officials started an annual meeting yesterday to decide economic policies for next year after last month agreeing on the broadest long-term reforms since the 1990s. “On balance, demand weakened due to the poor investment results,” with capital spending accounting for half of the economy, Dariusz Kowalczyk, Hong Kong-based strategist at Credit Agricole CIB, said in a note.
Fixed-asset investment excluding rural households increased 19,9 percent in the first 11 months of the year, less than estimated, yesterday’s data showed.
“While retail sales suggest ‘improved consumption,’ a broader look at the data points to a slowing economy,” he said.
Estimates for industrial production growth ranged from 9,6 percent to 10,5 percent, following a 10,3 percent gain in October. Retail sales were forecast to rise 13,2 percent, after a 13,3 percent pace in the previous month.
The median estimate was 20 percent for fixed-asset investment expansion in the first 11 months of the year.
China’s economy expanded 7,8 percent in the third quarter from a year earlier, rebounding from a slowdown in the two preceding periods.
Analysts surveyed by Bloomberg News last month see growth easing to 7,6 percent this quarter and 7,5 percent in 2014, based on median estimates.
Leaders yesterday opened their annual central economic work conference to set goals and policies for 2014, according to the official Xinhua News Agency.
“While the growth target may be decided at the meeting and reported in Chinese media afterward, it won’t be officially announced until the National People’s Congress meets in March,” Zhang Zhiwei, chief China economist at Nomura Holdings Inc in Hong Kong, said in a report.
Customs data released on Sunday showed China’s trade balance had the largest surplus in more than four years as exports rose 1,7 percent from a year earlier and imports gained 5,3 percent.
While the increase in exports topped projections from 41 of 42 analysts surveyed by Bloomberg News, the data triggered speculation among some analysts that capital flows disguised as trade could be boosting the export numbers, a practice that authorities tried to crack down on in May.
Yesterday’ s data show the previously reported export growth was inflated because the industrial-production figures indicate goods for export advanced only 5,8 percent, Zhang said.
China’s foreign-exchange regulator said last week that it will boost scrutiny of trade financing and that banks should prevent companies from getting financing based on fabricated trade.
The measures are aimed at preventing abnormal foreign-exchange flows, the State Administration of Foreign Exchange said in a statement posted on its website. Other previously released data showed an official gauge of manufacturing purchasing managers in November was unchanged from October, while a private index from HSBC Holdings Plc and Markit Economics fell. — Bloomberg.
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