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China Oct industrial output, retail sales beat expectations -Breaking

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© Reuters. FILEPHOTO: A Gree employee inspects the circuit boards on the production line for controllers. This inspection was done following the COVID-19 outbreak in Wuhan (Hubei Province, China), August 16th, 2021. China Daily via REUTERS

BEIJING, (Reuters) – China’s industrial output grew faster than expected in October despite new curbs on COVID-19 epidemics and shortages of supplies that threatened to slow down the recovery in China’s second largest economy.

China’s October industrial production grew by 3.5% compared with the same time last year, according to official data. The increase was faster than the 3.1% rise in September. Also, retail sales growth increased.

According to a Reuters survey of analysts, the industrial output growth exceeded expectations by 3.0%.

Comparing to last year, October’s retail sales increased 4.9%. After rising 4.4% in September, analysts in the poll expected that retail sales would rise by 3.5% in October.

The growth in fixed assets investment slowed, however. It rose 6.1% in 10 months versus the 6.2% predicted by Reuters and 7.3% in January-September.

China’s sprawling industrial sector has seen its output slow this year. The September increase in production was the lowest since March 2020. This is due to higher raw material costs, power rationing, and environmental curbs.

A deepening credit crisis is affecting sentiment in China’s real estate market. Kaisa Group and China Evergrande are struggling with the looming defaults.

In the last few weeks regulators and the think-tank of the state council met with developers. The market expects some ease in credit policies and housing policies, to avoid a tough landing.

China faces another wave of COVID-19 related cases in the north.

Although the economy experienced a strong rebound after last year’s pandemic, it has now lost some steam.

In the third quarter of last year, gross domestic product increased 4.9% compared with a previous year. This was its slowest growth in a single year.

China’s official purchasing managers’ index for October https://www.reuters.com/world/china/china-factory-activity-contracts-second-month-official-pmi-2021-10-31showed factory activity declined for a second straight month in October, hurt by persistently high raw material prices and softer domestic demand.

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