Growth in China's factory output and retail sales jumped to eight-month highs in November as consumer inflation bounced off 33-month lows in the latest sign that its economy is snapping out of a protracted slump.
Analysts said Sunday's data showed China is enjoying an enviable mix of benign inflation and rebounding economic growth that allows Beijing to stand still on monetary and fiscal policies, or switch to an easier stance if needed.
"The Chinese economy is now in a sweet spot and can stay in the sweet spot through the first half of 2013," said Ting Lu, an economist at Bank of America-Merrill Lynch. "Beijing will be happy to sustain the current policy stance."
Data from the National Bureau of Statistics showed output from Chinese factories beat forecasts to climb 10.1 percent in November from a year ago, its best performance since March.
Annual growth in retail sales also surprised by jumping 14.9 percent in November, while fixed asset investment rose 20.7 percent in the first 11 months of the year, a shade below forecasts.
The batch of activity data came after an inflation report out earlier on Sunday showed China's consumer price index rose 2 percent in November from a year ago -- just under forecasts for a 2.1 percent gain -- as vegetable prices soared.
But economists said the rise in consumer prices from near three-year lows was far from worrying, especially since it is well under Beijing's annual 4 percent inflation target.
"We expect consumer inflation to not see a big rebound until the first quarter of next year," said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.
"Therefore, the central bank may stick to its current policy stance and we see little chance of further (policy) loosening towards the year end."