PBOC’s Zhou Says China’s Economy Improving as Data Due

China’s central bank governor and statistics chief signaled October data to be published from today will show growth improving this quarter in the world’s second-largest economy.

Some indicators are rebounding and the economy is stabilizing, Zhou Xiaochuan, head of the People’s Bank of China, said yesterday in Beijing at a briefing during the Communist Party’s 18th Congress. Ma Jiantang, head of the National Bureau of Statistics, said separately that people will be “more confident” about the fourth-quarter expansion.

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The ruling party yesterday started a weeklong meeting to choose its fifth generation of leaders amid signs that the economy is recovering from a seven-quarter slowdown. Service industries rebounded from the weakest expansion in at least 19 months, an official purchasing managers’ survey showed Nov. 3 and two separate reports showed a pickup in manufacturing.

“The new leadership will see to it that the economy will not deteriorate further,” Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong, said in a research note this week. “We expect slightly better growth from the data, amid infrastructure spending from the fiscal boost, and a more resilient consumption sector, but maintain that a recovery will be mild.”

Photographer: Nelson Ching/Bloomberg

People's Bank of China Governor Zhou Xiaochuan. Close

People's Bank of China Governor Zhou Xiaochuan.

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Photographer: Nelson Ching/Bloomberg

People's Bank of China Governor Zhou Xiaochuan.

Yi Gang, deputy governor of the central bank, said separately yesterday that fourth-quarter economic performance will be “relatively good.”

Damping Demand

China’s economic growth this year may be the weakest since 1999 after the global slowdown crimped exports and government policies to curb inflation and property speculation damped domestic demand. Expansion may ease to 7.7 percent from 9.3 percent in 2011, according to the median estimate of 45 analysts surveyed by Bloomberg News from Oct. 18-22.

The economy grew 7.4 percent in the third quarter from a year earlier, the weakest pace in three years, statistics bureau data released last month showed. Fourth-quarter growth may rebound to 7.7 percent, according to the median estimate of 30 economists.

Zhou said policy next year should stay targeted and flexible while also maintaining some room for adjustment, as the economy faces potential risks including the so-called U.S. fiscal cliff. That refers to $607 billion in federal spending cuts and tax increases scheduled to take effect in January unless the nation’s legislature acts.

The bureau is due to report industrial output, retail sales and inflation figures for October and fixed-asset investment for the first 10 months of the year today and the customs administration will report trade data on Nov. 10. The PBOC is due to report new lending and money-supply growth by Nov. 15.

Industrial Output

Industrial-output growth probably accelerated for a second month to 9.4 percent, according to the median estimate in a Bloomberg News survey of 33 analysts. Fixed-asset investment excluding rural households in the first 10 months of the year climbed 20.6 percent after a 20.5 percent gain in the first nine months, a separate survey showed.

Consumer prices in October probably rose 1.9 percent from a year earlier, unchanged from the pace in September, while the drop in the producer-price index eased to 2.7 percent from 3.6 percent the previous month, according to the median estimates of economists.

Growth in exports and imports probably picked up in October, with overseas shipments rising the most since June, separate surveys showed.

To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net; Penny Peng in Beijing at ppeng18@bloomberg.net; Cynthia Li in Hong Kong at cli205@bloomberg.net; Zheng Lifei in Beijing at lzheng32@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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