China’s economic recovery remained largely on track in October, activity data out Monday suggested.
Retail sales in the world’s second largest economy grew 4.3% YoY in October. That was less than the 5% consensus was looking for, but nevertheless marks a third consecutive monthly rise. Domestic demand, it would appear, is firming.
Industrial output rose 6.9% YoY last month. That was better than expected. Cumulative fixed asset investment rose 1.8%.
The surveyed jobless rate ticked lower to 5.3%.
While there’s nothing here that blows the doors off, the data underscores a familiar narrative. China has largely put the pandemic in the rearview, even as the western world is now grappling with the worst outbreak yet. If there’s a concern for Beijing, it’s that subdued external demand will eventually undercut exports.
China also moved to allay some fears about tighter monetary policy Monday. The PBoC conducted 800 billion yuan of MLF. The rate was unchanged, but only 600 billion was due in November, so this more than rolls maturing funding, and will come as something of a relief.
Even in the face of ostensibly good data, there’s plenty to fret over if hand-wringing is your thing. For investors, one concern is Xi’s suddenly aggressive approach to dealing with China’s tech giants, whose shares careened lower early last week amid a hodgepodge of new regulations pitched as an effort to expand on the country’s anti-monopoly laws.
Beijing’s seemingly abrupt regulatory blitz came just a week after the government’s eleventh hour intervention in Ant’s planned IPO. Taken together, the moves suggest Xi’s avowed desire to foster innovation and put his country at the forefront of the global technology arms race doesn’t mean turning a blind eye to the unchecked accumulation of power by the likes of Alibaba and Tencent, among others.
And then there’s Donald Trump, who’s behaving like some kind of angry, wounded badger that’s been backed into a corner and is now poised to scratch and claw his way out. Late last week, Trump banned some US investments in Chinese companies owned or operated by the PLA, a move Beijing derided on Monday as “unreasonable.”
According to Axios, Trump plans to “enact a series of hardline policies during his final 10 weeks to cement his legacy on China.” That’s according to senior administration personnel with direct knowledge of the plans who said Trump intends “to sanction or restrict trade with more Chinese companies, government entities and officials for alleged complicity in human rights violations in Xinjiang and Hong Kong, or threatening US national security.”
While the White House is busy trying to get in a few final jabs before Trump makes an unceremonious exit, China, Japan, South Korea and a dozen other nations on Sunday inked the world’s largest regional free-trade pact. It covers almost a third of the world’s population and GDP.