China's economy indicates signs of growth in October. The reports show that the country's infrastructure investment and its industries are key factors in its growth while its retail sales are pulling its output downwards.
The October data shows that the countries industrial production exceeded expectations as it gained 5.9 percent from last year. Fixed asset investments increased to 5.7 percent in October which also exceeded the projection of 5.5 percent. The results show that the government's funds supporting the industries are paying-off creating an impact on its economy.
Consumers, however, are in a downbeat mood due to the slowing property market that causes worsening of the country's outlook. The reports indicated that China's retail sales decelerating to 8.6 percent in October from 9.2 percent last month. Data also showed that new home sales are increasing at a slow pace within six months.
Data shows that despite the growth in the country's output, policymakers are still worried about the slowdown that the country experienced during the third quarter of this year. The slowdown is the economy's weakest in almost a decade. The pressure on the country's output predicts that the upcoming stimulus is needed to stabilize the country's economic growth.
Frederic Neuman said that China's economy continues to grapple with stiff headwinds. He added that more stimuli will be needed in coming months to prevent a sharper deceleration in overall growth and to prop up household spending and private investment in particular. Mr. Neuman is the co-head of the Asian economics research at HSBC Holdings Plc in Hong Kong.
Liu Aihua, the spokeswoman for the National Bureau of Statistics, said on Wednesday that the investments on environmental protection and cleanup, and road transportations projects were among the key factors of the rise of the country's output. China, as remembered, emphasized on the fast construction of these projects since October. Liu added that some infrastructure projects resumed construction, and some major hydropower, transportation, and energy projects have sped up indicating that the government's policies supporting the projects are in effect.
Liu noted that the 3.3 to 3.7 percent expansion of China's infrastructure investment showed that the recovery is still at a low level and that there's a need to beef up support via policy, funding, and implementation.
Chang Shu and Justin Jimenez, Bloomberg Economists, said that while the broad stabilization in October activity growth is a relief, the country's weak credit data suggests that the economy will continue to search for a bottom in the coming months.
