Bloomberg: China’s Recovery Strengthens as Production, New Lending Advance
I think this article really illustrates the loonacy of Chinese economic statistics.
Factory production up:
“Output at the nation’s factories gained 12.3 percent from a year earlier, the most since August 2008, the statistics bureau said in Beijing today. Local-currency new loans were 410.4 billion yuan ($60 billion), up from 355.9 billion yuan in July, the central bank reported.”
Retail Sales Up:
“Retail sales climbed 15.4 percent in August from a year before, the most for the year after accounting for seasonal distortions caused by the lunar new year holiday, statistics bureau data showed today. The median estimate was for a 15.3 percent advance.”
Inflation down:
“Other figures today showed consumer prices fell 1.2 percent last month from a year earlier, declining for a seventh month and giving the central bank more room to keep interest rates at a four-year low to stoke growth. Producer prices dropped 7.9 percent compared with a record 8.2 percent fall last month.”
It seems that in China you can have your cake and eat it too. Because of the excessive demand both factory production and retail sales are raging higher but at the same time consumer pries and producer prices managed to continue to drop at extreme rates. I guess if you have a stimulus and lending program that you want to continue with abandon it helps to show that it is both working and that there is no inflationary effect.
For the full article see:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNqwafupzjfk