China’s recovery runs out of steam

China's batch of November data was widely watched for signs that the economic uptick of recent weeks could be sustained. On the plus side, industrial output growth climbed to 10.1% year-on-year, the highest figure since March.

Electricity production, an indicator of overall economic activity, was up by 7.9% on an annual basis. Year-to-date fixed-asset investment growth was steady, however, while trade was a disappointment. Export growth slumped to an annual 2.9% from October's 11.6%.

What the commentators said

The weak trade data are "a reminder that for all of Beijing's efforts to rev up the economy, China is still exposed to the risks of sluggish demand" elsewhere, said Simon Rabinovitch in the FT. China may be trying to rebalance the economy away from exports over the longer term, but they still accounted for a third of GDP growth last year. And given the shaky state of the developed world, "strong external headwinds" are set to persist, said HSBC's Ma Xiaoping.

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In the meantime, the economy has certainly picked up speed. The Wall Street Journal notes that electricity production growth was a mere 3.6% in the first nine months of 2012, which would suggest that the economy has already "gone through a hard landing". But the rebound has been "driven by infrastructure spending and little else", said Capital Economics.

Real retail spending growth has been stable, and manufacturing investment has yet to turn around. The output of light industry, more sensitive to shifts in household and export demand than investment, "has barely moved" in the past three months.

Moreover, slowing imports and steady fixed investment growth suggest that the rebound may be losing steam. The government will also be wary of further stimulus for fear of merely creating yet more bad loans in the state-driven banking system. In short, concluded Capital Economics, there is still no sign of a "broad-based pick-up" in Chinese economic growth.