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China Industrial Output, Retail Sales Growth Improves In November

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China's industrial production and retail sales growth improved in November, setting the stage for a full year growth, while all other major economies struggle to move out of the coronavirus pandemic.

Industrial production grew 7 percent year-on-year in November, after rising 6.9 percent in October, data published by the National Bureau of Statistics showed Tuesday. The rate came in line with economists' expectations.

Retail sales growth improved to 5 percent from 4.3 percent a month ago. However, this was slightly weaker than the economists' forecast of 5.2 percent.

The unemployment rate fell slightly to 5.2 percent in November, in line with forecast, from 5.3 percent in the previous month.

During January to November period, fixed asset investment rose 2.6 percent from the same period last year, as expected.

Early this month, the Asian Development Bank upgraded China's 2020 growth outlook to 2.1 percent from 1.8 percent. The projection for next year was retained at 7.7 percent.

Julian Evans-Pritchard and Sheana Yue, economists at Capital Economics, said output is expected to remain above-trend in the coming quarters, even as tailwinds from stimulus and exports start to ease.

They said activity will remain strong in the near-term as households run down the excess savings they accumulated this year.

The technology war is the biggest risk for China in 2021, along with the risk of credit defaults continuing, Iris Pang, an ING economist said.

"We are not particularly optimistic on the Chinese economy in 2021 though the trade relationship with the US could improve but that may not happen immediately after Biden will be in office," ING economist added.

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