China’s economy remains on track as real estate investment shows no sign of being slowed by the recent introduction of property buying curbs by more than 20 major cities.
In fact the monthly economic data drop yesterday showed retail sales eased in October, but industrial production and investment held more or less steady.
Retail sales growth softened to 10% annual growth from 10.7% in September, which will be a worry if the fall is repeated in November, according to analysts.
Figures from China’s National Bureau of Statistics bureau showed industrial production rose 6.1% year on year in October, unchanged from September.
The Bureau’s figures showed a small rise in crude steel output last month to 68.51 million tonnes in October, up 4% from a year ago, and up slightly from September’s 68.2 million tonnes.
Total output for the first 10 months of 2016 edged up 0.7% to 672.96 million tonnes.
Manufacturing output rose 6.7% and electricity, gas and water production were up 7.9%, but mining output fell 2.2% thanks to the curbs on coal production and lower oil and gas output.
China’s daily crude oil production in October fell to the lowest in more than seven years, the statistics bureau data showed.Oil output last mont dropped 11.3% from the same time a year ago to 16.05 million tonnes, the National Bureau of Statistics reported. The figure is up slightly from September’s 15.98 million tonnes. On a daily basis, October production was 3.78 million barrels per day (bpd), the lowest since May 2009, and down from 3.89 million bpd in September. Natural gas production also eased.
And urban fixed asset investment, a proxy for long-term spending, grew at an annual 8.3% in October, up slightly from the 8.2% rate in September.
And behind that small gain was another month of growth in real estate investment. The Statistics Bureau reported that growth in real estate investment for the January-October period came in at 6.6%, up 0.8 percentage points from the nine months to September, and third successive month of growth since hitting its low of 5.3% in July.
This is despite the curbs on property purchases introduced in many major cities from late September onwards.
And sales growth appears to have barely taken a dent as of the end of last month, whether measured in value or volume.
Floor space sold rose to 1.2bn square metres in the year ended October, up 41.2% year on year. In value terms sales came to Rmb9.148tn for the 10 months, a rise of 26.8% year on year. Both rates were down only 0.1 percentage points from September.
The latest data seem to point to resilience rather than a full-on retreat.
But the full impact of recent curbs will become clearer on Friday, when October house price figures for the top 70 Chinese cities are due for release.
Overall, Chinese private investment for the year ended October was up 2.9%, up 0.4 percentage points, while state investment dropped 1.1 percentage points to 20.5%.
That pushed the state share of total investment for the year to date down marginally to 36.6%, still the largest share since 2011 and a clear indicator of the central role of government spending (stimulus) in sustaining economic growth during 2016.
China’s trade surplus widened slightly in October – to US$49.1 billion. In monthly terms, both imports and exports were considerably weaker – however this largely reflected the impact of the Golden Week holidays at the start of the month.
