Factory output and demand grow as recovery steps up

China's industrial output accelerated in October, retail sales showed a solid gain and inflation was stable as the world's second-largest economy showed early signs of fourth-quarter strength.

China's industrial output accelerated in October, retail sales showed a solid gain and inflation was stable as the world's second-largest economy showed early signs of fourth-quarter strength.

The 10.3 per cent year-on-year gain in production at China's factories, workshops and mines announced by the National Bureau of Statistics marks a marginal acceleration from September, when the indicator showed an increase of 10.2 per cent.

It was also stronger than analysts' expectations, exceeding the median forecast of 10 per cent in a poll of 13 economists by The Wall Street Journal.

Retail sales, a key indicator for consumer spending, gained 13.3 per cent in October from the same month the year before, the NBS said, the same result as September.

China's consumer price index, meanwhile, accelerated slightly to 3.2 per cent in October from the same month last year, led by higher food prices, after rising 3.1 per cent in September.

The data show that "growth momentum in October was quite solid" and "the recovery momentum is slightly stronger and more sustainable than what markets had expected", economists at Bank of America Merrill Lynch said in a report, adding that "inflation is still not a threat".

China's exports grew 5.6 per cent year-on-year in October to $US185.4 billion ($196.8 billion), reversing a 0.3 per cent fall in September, the General Administration of Customs announced on Friday.

October's data results have added to evidence that the country's economy is picking up, and will likely be welcomed by China's ruling Communist Party, which on Saturday kicked off a closely watched four-day meeting focused on economic reform.

The gathering, known as the Third Plenum, has traditionally set the economic tone for a new government, and comes a year after China embarked on a once-a-decade leadership transition that was completed in March.

China's economy - a key driver of regional and global growth - expanded 7.8 per cent in the three months from July to September, the NBS announced last month, snapping a two-quarter slowdown.

The country's leaders say they want to retool its economic model away from a reliance on big ticket government-led investments and make private, such as consumer, spending the key driver for what they hope will be more moderate yet sustainable expansion.

Fixed asset investment, a measure of government spending on infrastructure, rose 20.1 per cent during the first 10 months of this year from the same period in 2012, the NBS said.

That marked a slowdown, as the indicator had increased by 20.2 per cent during the first nine months. A gain in food prices, which were 6.5 per cent higher than the year before, was the main driver for October's CPI, NBS data showed. AFP

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