(MENAFN) China's economy exhibited signs of recovery in October with notable improvements in factory output and retail sales, according to government reports released on Wednesday. Factory output experienced a 4.6 percent year-on-year increase, while retail sales surged by 7.6 percent, driven by robust spending during the weeklong National Day holidays. Despite these positive indicators, the real estate sector continued to face challenges, with a significant 9.3 percent decline in investment. Officials acknowledged that the property industry is still undergoing adjustment following a crackdown on excessive borrowing by developers two years ago, coupled with the lingering effects of the pandemic.
The report highlighted the ongoing struggles in the real estate sector, which has been a focal point for economic policymakers. The industry's decline has persisted, impacting investment levels as the government aims to address issues of excessive debt and speculative practices. While manufacturing, retail, and other sectors have shown signs of recovery, the sluggish performance of real estate remains a notable concern.
The data also reflect the lower rates of growth a year earlier during the disruptions caused by the pandemic. China's leaders abandoned their "zero-COVID" policies aimed at preventing infections nearly a year ago, leading to improvements in economic data from October onwards. The overall recovery from the pandemic in China has been inconsistent, with recent activity experiencing a revival, prompting economists to revise growth estimates for this year, exceeding the government's target of about 5 percent.
Despite the positive economic indicators, China faced a slowdown during the summer as global demand for exports waned, and the property sector faced further challenges. In the third quarter, the economy expanded at a 4.9 percent annual pace, surpassing analysts' forecasts but still notably slower than the 6.3 percent growth rate in the previous quarter.
The resurgence in economic activity in China coincides with President Xi Jinping's meeting with U.S. President Joe Biden on the sidelines of a Pacific Rim summit in California. The mixed signals in economic data underline the complexities and challenges facing China's ongoing recovery efforts.
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