Latest China Economic Data

Chinese industrial output and investment grew intensively in August, which means that the economic recovery is on a solid course. Beijing, however, is still unlikely to tap on the policy brakes too hard for fear of derailing it.

Industrial output grew at a 12-month high of 12.3 percent in August from a year earlier, jumping from 10.8 percent in July and beating expectations of a 12.0 percent rise, data issued by the National Bureau of Statistics showed on Friday.

Annual urban fixed-asset investment growth also picked up, reaching 33.0 percent for the first eight months, notching up from 32.9 percent in January to July and beating forecasts of 32.5 percent.

"The data shows that the Chinese economy continues to strengthen overall," said Rob Subbaraman, chief Asia economist with Nomura in Hong Kong.

"There's a pretty good configuration of data: on the activity side there is further strengthening and on the inflation side there is still negative inflation, so I don't think there's a real urgency to tighten policy aggressively."

Despite the signs of strength, analysts expect policymakers to proceed cautiously to avoid pulling on the reins of monetary and fiscal policy too quickly, after a steady flow of assurances from Beijing that it would not exit from stimulus too soon, Reuters reports.

In the meantime, the only weak spot in August's data was trade. Exports fell 23.4 percent from a year earlier, a sharper drop than expected and accelerating from July's 23 percent fall as global demand remained frail.

"Clearly, it shows that the domestic economy is doing much better because of the (government) stimulus, and external demand is still quite weak," said Tao Wang, economist with UBS in Beijing.

"I don't think weakness in exports is going to derail the fact that the general economy will continue to recover."

Industrial output grew at a 12-month high of 12.3 percent in August from a year earlier, jumping from 10.8 percent in July and beating expectations of a 12.0 percent rise, data issued by the National Bureau of Statistics showed on Friday.

Investment growth also picked up a touch, and banks extended more new loans in August than in July, supporting shares of Chinese banks, the New York Times reports

Forbes quoted Zhu Jiafang, Chief Macroeconomist at Citic Securities as saying, “The overall numbers aren't bad, especially industrial output. Consumption is also stable. Investment growth last month was under 30 percent, but this month it is 33 percent -- that's good. The overall trend of the economy is still stable, and the numbers for the fourth quarter will be better than a year ago.

'There is no possibility they will raise interest rates in the fourth quarter. At least, we'll have to wait until the second quarter next year,” Forbes reports.