China’s Economy Picked Up in November on Industry Output, Retail

Workers walk past machinery in the mineral selection shop at the Dongguashan Copper Mine, operated by Tongling Nonferrous Metals Group Co., in Tongling, Anhui province, China, on Thursday, Jan. 17, 2019. On the heels of record refined copper output last year, China's No. 2 producer, Tongling, says it'll defy economic gloom and strive to churn out even more of the metal in 2019. Photographer: Qilai Shen/Bloomberg , Bloomberg

Bloomberg News, Bloomberg News

Dec 15, 2019

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(Bloomberg) -- China’s economy showed signs of stabilizing and regaining growth momentum in November, adding to the good news for the nation’s outlook after a preliminary trade deal with the U.S. was reached last week.

Industrial output rose 6.2% from a year earlier, versus a median estimate of 5.0%. Retail sales expanded 8.0%, compared to a projected 7.6% increase. Fixed-asset investment was unchanged at 5.2% in the first eleven months, the same as forecast.

Key Insights

  • The data show that efforts to brake the slowdown in the economy may finally be taking root, after a year in which the long-term deceleration in output was exacerbated by uncertainty overseas and weak demand at home.
  • For 2020, the nation’s leaders said last week that they want to prioritize stability and keep growth within a “reasonable range.” Fiscal policy should be more proactive and effective, while prudent monetary policy should be “flexible and appropriate,” according to a statement released after the Central Economic Work Conference.
  • On Friday, China and the U.S. announced they’d come to a preliminary trade agreement, staving off higher tariffs this month. That might bring some certainty to business and encourage investment.
  • However, the promised reductions in tariffs are unlikely to take effect until February at the earliest and that may postpone the real-world impact. Chinese exports to the U.S. fell in 10 of the 11 months this year.

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  • “It is the start of something - we have a lot of infrastructure investment at the start of the year, and now the investment has come to the production stage,” said Iris Pang, an economist at ING Bank NV in Hong Kong. “We see the PMI rise, we also see the industrial production rise in November. For retail sales, it’s all expected as we have the Double-11 sale in November.”

--With assistance from Tomoko Sato.

To contact Bloomberg News staff for this story: Lin Zhu in Beijing at lzhu243@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger

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