China's economic data steady, restructuring ongoing

BEIJING - A list of key economic data released Tuesday including industrial output and fixed-asset investment pointed to stabilization and restructuring progress in the Chinese economy.

China's industrial output expanded 6.2 percent year-on-year in November, with the growth rate 0.1 percentage point higher than October, largely buoyed by fast-developing high-tech, electronic equipment and automobile sectors, the National Bureau of Statistics (NBS) said Tuesday.

Industrial output, officially called industrial value added, which is used to measure activity of designated large enterprises with annual turnover of at least 20 million yuan ($2.9 million), grew 6 percent in the first 11 months compared with the previous year.

"The structure of China's industrial output continues to improve," said NBS spokesperson Mao Shengyong at a press conference, citing annual industrial output growth of the high-tech manufacturing sector reaching 10.6 percent in November and robust profit gains of large firms.

Industrial enterprises above the designated size reaped profits of 5.3 trillion yuan in the first ten months, representing an increase of 8.6 percent from the previous year, and the growth pace quickened by 0.2 percentage points from the first nine months.

Power generation, a key barometer for measuring economic activity, rose 7 percent in November from a year earlier, confirming the growth momentum of the world's second largest economy.

The trend was supported by a slew of other key economic data released Tuesday.

China's fixed-asset investment rose 8.3 percent year on year to 53.9 trillion yuan in the first 11 months, with the growth rate unchanged from the January-October period, while private sector fixed-asset investment, which accounts for more than 60 percent of the total, expanded 3.1 percent in the first 11 months, accelerating from 2.9 percent in the first ten months.

Real estate investment rose 6.5 percent year-on-year in the first 11 months, cooling from the 6.6 percent registered during the January-October period, as measures rolled out by the government to rein in house prices began to take effect.

Moreover, China's retail sales of consumer goods grew 10.8 percent year on year in November, accelerating from the 10 percent increase posted for October, with online sales surging 26.2 percent from January to November year-on-year to 4.6 trillion yuan.

China has been transitioning to a service and innovation-driven economy from an export-reliant one in recent years, with the economy expanding at a steady 6.7 percent in the first three quarters this year.

Tuesday's data was released prior to this year's annual Central Economic Work Conference, an important economic event that maps out economic priorities and reform plans for the upcoming year.

Despite a troublesome start, weakness in the yuan, capital outflows reaping havoc on financial markets, an overheated property market, and headwinds from home and abroad, the Chinese economy is ending 2016 on a firm footing.

"The Chinese economy continues to hold steady with more positive changes emerging," said Mao, adding that China needs to push forward with reforms, including supply-side structural reform, and foster new growth drivers amid a world economy beset by instability.

"November activity data surprised the market on the upside, as the economic recovery gained momentum," said Julia Wang, HSBC economist.

It is widely expected that the Chinese economy will register annual growth of around 6.7 percent, within the government's target range of 6.5 to 7 percent set at the beginning of the year.

"With the economy having just emerged from a period of deflation, and with the recovery still looking quite uneven, policy support should remain in place until the recovery becomes more broad-based," Wang said.