China’s economy continued to storm back from the depths in October, as factory outputs raced to meet rising retail sales in a better-than-expected recovery for the country’s economy.
Per data from the National Statistics Bureau, industrial production rose by 6.9 percent on the year, similar to September’s rise and above experts’ expectations for the month.
“The latest data suggest that the broad-based acceleration of China’s economy continued in October,” explained Capital Economics’ Julian Evans-Pritchard.
As the coronavirus appears to be well in hand in China at the moment, experts believe that this has prompted domestic buyers to emerge from quarantine with money to spend.
“Policy stimulus continued to boost investment and industrial output while growth in real retail sales and services activity returned to pre-virus levels.”
As a result, aluminium production rose to record levels, sparked in part by a 12.5-percent rise in October in automotive sales. Among the strongest drivers of the rise was the surging demand for electric vehicles.
However, experts warned that Beijing ought to avoid tightening monetary policy, lest the manipulation slow the recovery.
“Domestic demand remains relatively weak, and any move to tighten policy could hurt the economic recovery,” explained Hwabao Trust economist Nie Wen.
Another danger to China’s strong recovery is trade friction with its biggest trading partner, the United States. Despite a new administration, experts say the Biden presidency is expected to maintain a hard line against China. The administration is likely to block China’s access to advanced technology, though it is hoped that it would act somewhat more predictably and less aggressively than its predecessor. The incoming administration has not yet gone on record regarding import tariffs currently in place against Chinese goods.