Chinese economy stabilises as retail sales beat forecasts

Figures indicate Beijing°s latest round of stimulus has boosted some key sectors

BEIJING - China's economy showed signs of stabilisation in October, buoyed by the highest retail sales growth in eight months and indicating that Beijing's latest round of stimulus has boosted some key sectors.

Retail sales increased 4.8 per cent in October from a year ago, the strongest growth since February and exceeding all estimates in a Bloomberg survey. Industrial output rose 5.3 per cent, lower than forecast.

The strength in retail spending represents improvement in a part of the economy that has struggled with sluggish sentiment and trailed growth in production, which has long benefited from Beijing's manufacturing-focused policy support.

"The policymakers will be pleased to see the rally in retail sales," said Mr Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group. "They'd rather sacrifice a bit of factory activity for consumption, although it is still early to tell whether the two-speed economy has ended."