China’s Industrial Output, Retail Sales Accelerate

China’s industrial production and retail sales accelerated in October, bolstering forecasts for economic growth to exceed 10 percent this quarter for the first time in more than a year., Bloomberg 11/10/2009 10:31:16 PM

Production rose 16.1 percent from a year before, the most since March 2008, the statistics bureau said. Retail sales gained an annual 16.2 percent in October, and urban fixed-asset investment climbed 33.1 percent in the first 10 months of this year, it said.

The strengthening recovery in the world’s third-largest economy may spark concern that consumer and asset prices will climb next year, and put pressure on policy makers to pare their stimulus measures. The government may also face increasing international calls to allow the yuan to rise, after it halted gains last year to aid exporters.

China’s officials have already indicated they intend to tighten lending terms, and a central bank report today showed that credit growth eased in October. Banks extended 253 billion yuan ($37 billion) of new local-currency loans, compared with 516.7 billion yuan in September.

the dollar since July 2008, after allowing it to rise 21 percent in the previous three years. Yuan forwards indicated yesterday that traders expect the currency to resume gains, climbing 3 percent in the next year.

Consumer prices fell by 0.5 percent in October from a year ago, the smallest drop since declines began in February, and producer prices dropped 5.8 percent, according to the bureau.

The increase in retail sales last month was the biggest since December last year excluding seasonal distortions in January and February. SAIC Motor Corp., the biggest domestic automaker, sold 240,300 vehicles as the nation’s passenger-car sales surged.

Moody’s Investors Service on Nov. 9 raised China’s debt rating outlook to positive” from stable,” citing the government’s success in steering the nation through the global crisis and strong financial position, including $2.273 trillion of foreign-currency holdings.

Besides building 270,000 low-rent homes, 200,000 kilometers of rural roads and nearly 1,500 kilometers of railway under a $586 billion stimulus plan, China’s government has pressed banks to lend, flooding the economy with cash. The World Bank cautioned last week that the nation may risk asset bubbles and a misallocation of resources.”

Urban property prices jumped 3.9 percent in October, the biggest increase in 14 months, the statistics bureau said yesterday. The value of sales jumped 79.2 percent in the first 10 months of 2009 from a year earlier.

China’s Industrial Output, Retail Sales Accelerate