BEIJING: China's industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve more broadly from the coronavirus crisis.
An annual decline in fixed-asset investment over January-August also moderated thanks to expanded stimulus from Beijing, but authorities remain wary about the outlook given heightened external risks, including from intensifying Sino-US tensions.
After the pandemic paralysed the economy, China's recovery has been gaining momentum as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound. Floods across southwestern China that disrupted production in July have receded.
"Strong external demand, a further recovery from the pandemic and pent-up demand from the floods all contributed to the robust activity data in August," Ting Lu, chief China economist at Nomura, said in a note to clients.
Industrial output growth quickened to 5.6% in August from a year earlier, the fastest in eight months, data from the National Statistics Bureau showed on Tuesday. Analysts polled by Reuters had expected a 5.1% rise from 4.8% in July.
Retail sales also beat analysts' forecast with a 0.5% rise on-year, snapping a seven-month downturn and bettering expectations for zero growth. In July, sales dropped 1.1%, but consumer confidence has been picking up lately, from spending on automobiles and duty-free shopping.
Auto sales rose 11.8% in August year-on-year while sales of telecoms products jumped 25.1%, the data showed. The decline in fixed-asset investment slowed, falling 0.3% in January-August from the year-ago period, compared with a forecast 0.4% slide and a larger 1.6% decline in the first seven months of the year.
Private sector fixed-asset investment, which accounts for 60% of total investment, fell a less steep 2.8% in January-August, compared with a 5.7% decline in the first seven months. Property investment, a crucial growth driver, also jumped the most in 16 months in August.
In commodities, China posted record output in both crude steel and aluminium last month thanks to robust demand from the construction sector and recovery in automobile sales.
Recent economic indicators ranging from trade to producer prices and factory activity all suggested a further pick up in the industrial sector, and the broader economy.
Government stimulus has been a powerful domestic driver, while momentum has also been supported by Beijing's largely successful efforts to get the virus under control.
Data last week showed China's August exports marking the strongest annual gain since March 2019, as more of its trading partners eased coronavirus lockdowns.