China’s industrial production and retail sales grew more-than-expected in August, data showed on Friday. Suggesting the recovery in certain areas of the economy remained resilient despite headwinds of new COVID-related restrictions. Data from the National Bureau Statistics showed that Chinese factory output rose 4.2% in August, up from 3.8% growth previous month. The value also exceeded estimates of 3% growth. 8%.
The surge in industrial output comes as factories in hubs like Shanghai have ramped up activity to make up for deficits that emerged earlier this year due to COVID-related lockdowns.
Another report showed that Chinese retail sales rose 5.4% in August – the fastest pace of growth in six months. They are also exceeding growth expectations of 3, 5%. The readings show that activity in China’s major economic hubs is steadily rebounding after most COVID-related restrictions were lifted earlier this year.
Retail sales also appear to be benefiting from pent-up demand and an improving labor market. China unemployment rate fell slightly from 5% to 5.3% in August. 4% in the previous month. The positive data also reflects the impact of the stimulus measures introduced over the past two months to revive economic growth.
China has promised to increase spending in the third quarter to support the economy. A time when sentiment towards the Chinese economy is at a multi-year low, largely due to Beijing’s strict zero-COVID policy. China introduced new COVID-related restrictions in several regions over the past month, so far has refused to back down from policies that have stalled economic growth this year. Friday’s data follows last month’s PMI reading, which showed manufacturing activity contracted for the second straight month in August.
Positive figures for August, the Chinese economy has a long way to go to recover. Investors are wary of further COVID outbreaks and risks to economic growth from a battered real estate market. Earlier Friday, data showed that China’s house prices fell 1.00 in . 3% in August YoY. The Chinese yuan reacted slightly positive to Friday’s data, paring some early losses. But the currency slipped below 7 to the dollar, which is psychologically important. –SHREEMETALPRICES.