From commodities to retail, China's economy is showing signs of life after Beijing's stimulus frenzy

From commodities to retail, China's economy is showing signs of life after Beijing's stimulus frenzy
Chinese President Xi Jinping attends a meeting at the United Nations European headquarters in Geneva, Switzerland, January 18, 2017.REUTERS/Denis Balibouse
  • Chinese economic data indicated tentative signs of improvement after Beijing's flurry of stimulus efforts.
  • Retail sales and industrial production grew in August, beating expectations.

Tentative signs of stability are appearing across the Chinese economy, following a flurry of stimulus measures from the government.

According to data published Friday, retail sales rose 4.6% in August from a year ago, surpassing estimates, led by gains in travel and dining. Industrial production climbed 4.5%, also topping views, helped by the auto sector.

Key commodities pointed to improvement as well. Aluminum output rose 3.1% last month, steel output increased 3.2%, and crude refining jumped 20%.

The data comes after Beijing unleashed a series of piecemeal stimulus policies over recent months. Despite ending zero-COVID policies late last year, China's economic recovery has sputtered.

But it's unlikely that authorities will implement more robust aid, given the nation's history of debt and ideological obstacles among the top brass.


Hong Kong-listed Chinese stocks saw an uptick after Friday's data, though mainland equity markets gave up gains. But the reports did fuel rallies in other Asian markets, with indices in Japan, Australia and South Korea up more than 1%.

While the latest Chinese economic metrics were a welcome sign amid a pessimistic consensus, issues remain.

That's especially true for the country's uneasy property market, burdened by an ongoing debt crisis and lack of demand.

Home prices continued a multimonth decline in August, and fixed-asset investment slowed from earlier in the year.

Meanwhile, policies that reduced restrictions on home buying saw an uptick in property purchases, though this gain has since faded.