China Economy Stabilizes Amid Property Market Fears

China’s economy performed better than expected in October after retail sales increased and power shortages eased, cushioning the impacts of a weakening property sector.

Industrial output in China rose 3.5 percent in October from a year earlier, beating the previous month’s 3.1 percent, the country’s National Bureau of Statistics said Monday. The increase came as power crunches in the country eased along with government efforts to boost coal production.

Meanwhile, retail sales accelerated 4.9 percent, from 4.4 percent in September.

Both figures outstripped economists’ expectations. Experts surveyed by The Wall Street Journal expected as much as 2.8 percent growth in industrial output and 3.5 percent in the retail sector. Investments in fixed assets also remained stable at 6.1 percent despite the rattle in the property sector.

However, economic recovery remains uncertain due to the size of the property market embattled with tight regulations and massive debt from its largest players including China Evergrande Group. Beijing has not yet announced any policy plans to address problems in the sector.

Real estate and its related industries account for about 25 percent of China’s gross domestic product.


© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.