China Economy

China's factory output rises more than expected, retail sales continue to grow in October

Key Points
  • China's industrial output rose at a faster-than-expected pace in October, while retail sales continued to recover albeit at a slower-than-forecast pace as the world's second-largest economy emerged from its Covid-19 slump.
  • Industrial output climbed 6.9%% in October from a year earlier, data from the National Statistics Bureau showed on Monday, in line with September's gain. Analysts polled by Reuters had expected a 6.5% rise.
  • Retail sales rose 4.3% on-year, missing analysts' forecasts for 4.9% growth but faster than a 3.3% increase in September.
A textile worker works on the production line. Taizhou City, Jiangsu Province, China, Oct. 6, 2020.
Costfoto | Barcroft Media | Getty Images

China's industrial output rose at a faster-than-expected pace in October, while retail sales continued to recover albeit at a slower-than-forecast pace as the world's second-largest economy emerged from its Covid-19 slump.

Industrial output climbed 6.9%% in October from a year earlier, data from the National Statistics Bureau showed on Monday, in line with September's gain. Analysts polled by Reuters had expected a 6.5% rise.

After the pandemic paralyzed huge swathes of the economy this year, the industrial sector has staged an impressive turnaround, helped by resilient exports. Now, with coronavirus largely under control in China, consumers are opening up their wallets again in a further boost to economic activity.

Retail sales rose 4.3% on-year, missing analysts' forecasts for 4.9% growth but faster than a 3.3% increase in September.

China's auto industry reported robust 12.5% growth in October vehicle sales thanks to surging demand for electric cars and trucks.

Domestic tourism also saw a strong rebound over the Golden Week holiday last month, although levels were still well short of last year's.

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Fixed-asset investment rose 1.8% in January-October from the same period last year, compared with a forecast 1.6% growth and a 0.8% increase in the first nine months of the year.

Private sector fixed-asset investment, which accounts for 60% of total investment, fell 0.7% in January-October, compared with a 1.5% decline in the first nine months of the year.

China's economic recovery looks to be accelerating in the fourth quarter, with a rebound in demand, strong credit growth and stimulus measures expected to provide a strong tailwind into 2021.

But surging coronavirus infections in Europe and the United States have prompted renewed lockdowns, clouding the global outlook.