China’s economy showed signs of stabilizing last month, with retail sales and factory output beating expectations as a power supply crisis appeared to ease, data released yesterday showed.
The recovery in the world’s second-largest economy has been losing steam for much of the year after a swift bounceback from harsh lockdowns to contain COVID-19, with officials earlier citing an “unstable and uneven” economic rebound.
Power outages in the past few months caused by emission reduction targets, the surging price of coal and supply shortages also affected factory production.
However, industrial production grew 3.5 percent year-on-year last month, the National Bureau of Statistics (NBS) said, as China worked to boost coal production and ease its energy shortage. A survey of economists tipped a 3.0 percent expansion.
NBS spokesman Fu Linghui (傅令輝) said yesterday that the “international environment remains complex and severe” with many uncertainties, adding that China needs to “work harder to maintain economic stability and recovery.”
“While electricity shortages and production cuts hampered output in early October, we don’t think they are a significant problem anymore,” Louis Kuijs of Oxford Economics said yesterday.
He added that this follows “a range of policy measures to boost coal production and lower coal prices.”
However, economic momentum remained weak last month, he said, “with the real estate downturn weighing on industry and a new wave of COVID outbreaks dampening household consumption.”
Retail sales rose 4.9 percent year-on-year last month, far exceeding forecasts for 3.7 percent, the latest data showed.
Yet observers warn that this could be bogged down by recent containment measures, reimposed following a fresh virus outbreak in the middle of last month that has spread to several regions.
Fu said that “domestic tourist numbers and income growth were below pre-pandemic levels” during the golden week holiday at the start of the month.
The urban unemployment rate remained at 4.9 percent.
Weakness in the economy is giving the country’s central bank a headache as it must try to nurture a recovery while at the same time keep a lid on inflation, which is at levels not seen since the mid-1990s.
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