Photographer: Qilai Shen/Bloomberg

China Economic Data Dump May Show Retail Gain, Investment Steady

  • Industrial output and investment remained stable, survey shows
  • Retail sales are projected to pick up while new loans rise

China watchers get their next triple dose of data on Tuesday, when gauges give a health snapshot of the world’s second-largest economy as it heads toward the end of 2016.

Retail sales picked up in November, while industrial output and fixed-asset investment remained steady, according to a Bloomberg survey of economists. Here’s what they’ll be expecting when the indicators are released Tuesday at 10 a.m. in Beijing:

  • Retail sales probably rose to a 10.2 percent year-on-year pace, the survey showed as of Friday. The prior month’s 10 percent gain was among the worst in at least a decade.
  • Industrial production probably held steady at 6.1 percent for a third straight month.
  • Fixed investment year-to-date probably stood at 8.3 percent for a second month. That’s an improvement from the July and August pace of 8.1 percent, the lowest since 1999.

China’s economy has gained a firmer footing as an official factory gauge matched a post-2012 high and producer prices increased faster than consumer prices for the first time in five years. That may prompt policy makers to shift focus to containing financial risks and reduce excess industrial capacity, which will improve the long-term health of the world’s second-largest economy.

"We expect the policy makers to maintain a hawkish stance until activity growth weakens and the need to support economic growth reemerges," Goldman Sachs Group Inc. analysts led by Maggie Wei in Hong Kong wrote in a recent note. The People’s Bank of China has held the benchmark interest rate at a record low for more than a year to help prop up growth.

Money supply data, which the PBOC typically releases around mid-month, may be released this week. The three main credit gauges all missed expectations last time.

Here’s what projections show for November:

  • Aggregate financing probably rebounded to 1.1 trillion yuan ($160 billion), after tumbling to a two-year low of 487.9 billion yuan in July
  • New yuan loans climbed 720 billion yuan from 651.3 billion yuan in October
  • Growth of the broad M2 money supply edged down to 11.5 percent from 11.6 percent

Authorities have quietly tightened the money supply by increasing some borrowing costs in the interbank market to curb corporate leverage. That’s a fine line for the policy makers to walk as expansive credit continues to fuel the nation’s economic engine.

— With assistance by Xiaoqing Pi, and Jeff Kearns

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