China’s industrial output, trade and retail sales improved last month, data showed yesterday, in positive signs for Beijing’s multibillion-dollar effort to restore stable growth in the world’s third-largest economy.
Consumer prices fell, possibly damping fears that stimulus spending might trigger a rise in inflation that could disrupt the rebound.
The flurry of data suggested China’s recovery is making progress, which could help to drive a global rebound from the worst economic downturn since the 1930s. But private sector activity is weak and economists say growth is still dependent on stimulus spending.
“The Chinese economy has shown some positive changes,” Li Xiaochao (李曉超), a spokesman for the National Bureau of Statistics, said at a news conference. However, he said, “profits of some enterprises still are in great decline.”
Industrial production rose 10.8 percent from a year earlier, the third straight monthly increase in growth, the statistics agency said. Retail sales climbed 15.2 percent, while investment in factories and other fixed assets also rose.
“These are mostly good signs,” said Citigroup economist Ken Peng (彭墾). “With improving external conditions, we should see growth pick up in the second half of the year.”
Imports and exports showed improvements over June, though both fell compared with a year earlier, customs data showed.
Imports dropped 14.9 percent from the same month last year, while exports fell 22.9 percent. But total trade was up US$17.5 billion from the previous month.
“That’s pretty solid improvement, even if the year-over-year comparisons continued to be ugly,” Peng said. He said last month’s declines were in part because the month was being compared with a peak in trade last year.
Also yesterday, the statistics bureau said July’s 1.8 percent fall in consumer prices from a year earlier was the sixth month of decline.
Wholesale prices fell even more sharply, dropping by 8.2 percent from a year earlier and reducing pressure for producers to pass on higher costs to consumers.
Such a decline was expected, especially because prices are being compared with a period of high inflation last year. But prolonged declines can cause economic problems.
“Deflation is still deepening,” said Citigroup’s Peng. “So demand is still not very solid, economy-wide.”
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