Asia’s two-paced boom continues.
Japan’s economy might be fading again, but everywhere else in the region, from India, to China, growth is soaring.
After strong third quarters, October and November have been solid across the region, but not in Japan, the world’s second biggest economy.
In fact November was a strong month for China, and South Korean growth has been upgraded as exports continue to rise.
China’s industrial production grew more than 19% in the year to November, much faster than any forecast and recalling the frenetic days of 2007-early 2008.
That was higher than the 16.1% rise in the year to October. Steel and car sales led output higher.
Chinese exports had their best month for just over a year, car sales surged, as did property prices and bank loans were again strong.
Exports fell 1.2% but were still sharply stronger compared to the decline in the previous month. China’s exports dropped 13.8% in October.
Factory output climbed 19.2% in the year to November, exports fell just 1.2% (a year ago however was weak as the Chinese economy and much of the world tumbled towards recession).
Consumer price inflation reversed its steady fall and rose 0.6%, the first positive reading for 10 months.
Chinese producing prices fell 2.1% in the year to November, which was up from falls of 6%-7% seen a couple of months ago.
Month on month consumer prices rose a higher-than-expected 0.6% in November, driven by a 3.2% jump in food prices, while non-food prices dropped 0.7% from October.
That’s got some western analysts warning China has inflation problems now on the agenda.
The reality is that the return of inflation isn’t a surprise, it has been expected as the deflationary pressures from early in the year eased.
South Korea’s economy is expected to have its best growth for three years next year.
The Bank of Korea forecast growth of 4.6% next year in its 2010 forecast, up from the 3.6% rise predicted in July.
South Korea’s economy grew 3.2% in the third quarter, the fastest rate in seven years, boosted by exports and local spending.
Goods exports will increase 9.3% next year, according to the forecast, after a 0.1% fall this year.
Private consumption will jump by more than 3% next year, with investment rising more than 9% after a fall this year.
Growth will edge up to a 4.8% rate in 2011, the central bank said.
“Our economy in the future will post bigger growth as momentum strengthens thanks to a recovery in the global economy and an improvement in consumption.
"The private sector is likely to lead economic growth as policy impacts weaken.” Still, there are a number of “uncertainties,” including a possible delay in the global recovery, the bank said.
In Japan, there’s a concern the economy could slid backwards early next year after the savage downgrade of the September quarter’s growth from 1.2% quarter on quarter, to just 0.3%.
The Bank of Japan’s Tankan business confidence index, due out later today, is forecast to show a slackening in confidence after a hesitant recovery in the June and September periods.
With the sharp downgrading of capital investment in Japan in the September quarter, some economists say this will translate to falling optimism in the Tankan survey.
In China new loans topped forecasts, rising 294.8 billion Yuan ($US43.2 billion), compared with the 253 billion Yuan in October.
That takes the 11 month total to more than 9.1 trillion, compared with the official limit of 5 trillion and the 2010 limit of a reported 8 trillion Yuan.
Steel product output reached a record and power production saw the biggest rise in five years.
Urban fixed investment slowed a touch, increasing by an annual 32.1% in the year to November, down from the 33.1% in the 12 months to October.
Exports to Asia jumped 20.8%, those to the U.S. and Europe fell at a slower pace.
Imports climbed 26.7%, the strongest performance in 16 months, because of rising commodity prices, the boost to domestic demand from stimulus policies and the low base in November 2008.
They were down 6.8% in October, so the rebound looks strong, but is influenced by the weakness a year ago
The trade surplus narrowed to $US19.1 billion.
Retail sales rose 15.8%, down from the 16.2% annual rate in October.
