BEIJING — China's factory output growth slowed in October and it was still too early to call a turn in the crisis-hit property sector even though consumers perked up, keeping alive calls for Beijing to top-up its recent blitz of stimulus to revitalize the economy.
The burst of data is likely to maintain pressure on Chinese policymakers as they brace for the return to the White House of Donald Trump, who has vowed to hike tariffs on Chinese goods and named China hawks to his Cabinet in a troubling sign for the world's second-biggest economy.
October industrial output grew 5.3 percent from a year earlier, National Bureau of Statistics (NBS) data showed on Friday, slowing from September's 5.4-percent pace and missing expectations for a 5.6-percent increase in a Reuters poll.
However, retail sales, a gauge of consumption, rose 4.8 percent in October, accelerating from the 3.2-percent pace in September and marking the quickest growth since February.
Retail growth was boosted by a weeklong holiday and the annual Singles' Day shopping festival, which kicked off on Oct. 14, 10 days earlier than last year.
Data provider Syntun estimated that sales across major e-commerce platforms rose 26.6 percent to 1.44 trillion yuan over the Singles Day event.
"China's economy improved further at the start of Q4, thanks to stronger-than-expected consumer spending," said Zichun Huang, China economist at Capital Economics.
"We think faster fiscal spending will support a continued cyclical pickup in activity over the coming months. But Trump's victory casts a shadow over the outlook further ahead," she added.
NBS spokesman Fu Linghui told a media briefing the recent policy measures appeared to be having a positive economic effect and that officials would continue to step up support.
"Changes in economic operations in September and October have strengthened China's confidence in achieving its 2024 target for economic growth" of around 5 percent, he added.
However, some economists said it was too early to determine whether September's latest tranche of policy support was sufficient to underpin a solid recovery.
"The stimulus impact should already be reflected in consumption, because the trade-in program has been in place for a few months," said Dan Wang, a Shanghai-based independent economist.
This meant "all the other more recent stimulus initiatives haven't shown any impact, including earlier stimulus focused on housing," she said.
The NBS said sales of home appliances surged 39.2 percent in October, driven by the consumer goods trade-in campaign.
Fixed asset investment rose 3.4 percent in the January-October period year-on-year, versus an expected 3.5-percent rise. It grew 3.4 percent in the January-September period.
China stocks slipped after the data while the yuan was down on Trump woes.
Property pains
"On the property side, conditions remain weak," said Xing Zhaopeng, ANZ's senior China strategist, adding there had been "no significant improvements in property investment, sales and prices."
The slide in property investment deepened in January-October.
Sales narrowed the slump, however, possibly indicating stimulus is starting to inject some life into the beleaguered sector, even if a robust recovery might take some time.
Property sales by floor area in the January-October period fell 15.8 percent year-on-year, slower than the 17.1-percent drop over January to September.
On Wednesday, authorities announced tax incentives on home and land transactions, which Zhao said indicated Beijing's "commitment to further stabilizing the property market."
More stimulus?
Trump's election win last week has also caused unease in China as the President-elect has threatened to impose tariffs of 60 percent or more on Chinese goods imports, which could potentially usher in a prolonged period of economic uncertainty and further delay a long-awaited revival.
"We expect Chinese policymakers to cut policy rates considerably (by 40 basis points) and expand the augmented fiscal deficit meaningfully (by 1.88 percentage points of gross domestic) in 2025," Goldman Sachs economists said in a note on Friday ahead of the data release, citing the risk the Trump administration poses to the recovery.
They added that "multi-year fiscal expansion would be necessary to counteract various cyclical growth headwinds and address some medium-term structural challenges."
China's central bank unveiled its biggest stimulus since the pandemic in September.
And last week, the country's top legislative body approved a 1-trillion yuan ($1.4 trillion) package to ease local government "hidden debt" burdens, rather than directly injecting money into the economy as some investors had hoped.
Analysts say the barrage of measures will only have a modest positive effect on economic activity in the near term.
"We think the economy will start to slow again by the second half of next year," Capital Economics' Huang said.
"By which point Chinese manufacturers will also be facing the additional headwind of a second trade war with Trump."
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