What to Expect From China's Next Data Dump

  • Industrial production likely up 6.2% last month, survey shows
  • Credit and new loan indicators out Friday showed a moderation

China’s next economic data dump Monday may show industrial production extending this year’s steady increase while retail sales and fixed-asset investment held recent gains.

Factory output increased 6.2 percent last month from a year earlier, according to economist estimates in a Bloomberg survey as of late Thursday. The reports due 10 a.m. Monday in Beijing may also show retail sales growth remained at 10.7 percent while fixed investment increased 8.2 percent in the first 10 months of the year, surveys show.

Such readings would add to evidence of an unmistakable firming, coming on the heels of reports that showed four years of factory-gate deflation have drawn to a close and a key manufacturing index at two-year high. That leaves the world’s second-largest economy in robust macro health as it braces for the presidency of Donald Trump, whose populist campaign included plans for punitive tariffs on imports from China.

"Short-term economic growth may have stabilized," Liu Liu, an analyst at China International Capital Corp. in Beijing, wrote in a report this week. "We expect faster growth of industrial production, investment and consumption."

Trump faces a Chinese economy that’s vastly bigger and more mature but less of a growth motor than the one faced by the last Republican administration. It’s also confronting a range of new challenges. Once driven by exports and investment, its growth model is shifting to depend more heavily on consumer spending and services.

Credit and money supply data released late Friday showed a moderation of total credit and new loans, while the money supply increased slightly. Here’s how the numbers looked:

  • Aggregate financing decreased to 896.3 billion yuan ($131 billion) in October, the People’s Bank of China said Friday, compared with a median estimate of 1 trillion yuan in a Bloomberg survey and 1.72 trillion yuan the prior month
  • New yuan loans edged down to 651.3 billion yuan from 1.22 trillion yuan in September
  • Broad M2 money supply rose 11.6 percent from a year earlier, up from 11.5 percent

China’s central bank, which has held benchmark interest rates at record lows for more than a year, said this week that the current level is in line with economic fundamentals. The People’s Bank of China said monetary policy should not provide “too much” liquidity and should prevent pushing up debt and leverage levels, according to a report issued Tuesday.

— With assistance by Jeff Kearns

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