November data has reinforced the cautious optimism that began to creep into the Chinese economy in September, as factory output and retail sales reached eight-month highs and inflation remained under control. Not all signs pointed in the same direction – exports rose less than expected for the month, and banks missed their targets for new loans – but the overall picture remained one of an economy poised to avert a hard landing and rebound in 2013. And HSBC’s preliminary survey of Chinese manufacturers rose for the fifth straight month in December, hitting a 14-month high.
Economists reacted positively to the data, according to The Sydney Morning Herald:
“The export slowdown shows external demand faces uncertainty due to concerns over the fiscal cliff in the US,” said Zhang Zhiwei, chief China economist at Nomura in Hong Kong. “Nonetheless it does not change our view that growth is on track for a strong recovery in Q4, as (growth) is mostly domestically driven.”
“The Chinese economy is now in a sweet spot and can stay in the sweet spot through the first half of 2013,” Ting Lu, an economist at Bank of America-Merrill Lynch, said before the trade figures were released. “Beijing will be happy to sustain the current policy stance.”
With China likely to post its slowest full-year of growth since 1999, however, Chinese leaders concluded the annual Central Economic Work Conference in Beijing on Sunday by warning that the world’s second largest economy is not yet out of the woods. With Europe’s debt crisis still raging, and with the U.S. economic recovery still uncertain amid the ongoing “fiscal cliff” deadlock in Washington, The Wall Street Journal adds that China’s new leaders “sent their strongest signal yet” that they will focus on retooling the economy to rely less on export growth
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