GROWTH in China’s industrial and retail sectors beat expectations in November, as government support propped up demand in the world’s second-largest economy and amid easing trade hostilities with Washington.

The set of upbeat figures released yesterday follow firm signs of progress in Sino-U.S. trade negotiations over the weekend after the world’s two largest economies announced a “phase one” trade deal.

Industrial production rose 6.2 percent year on year in November, data from the National Bureau of Statistics showed, beating the median forecast of 5 percent growth in a recent poll and quickening from 4.7 percent in October. It was also the fastest year-on-year growth in five months.

“Activity and spending indicators strengthened across the board last month, though we think this uptick will prove short-lived,” said Martin Lynge Rasmussen, Economist at Capital Economics.

“Admittedly, the phase-one trade deal could boost both export activity and corporate investment in the near term. But real estate, a key prop to growth in recent quarters, is primed for a moderation as financing to the sector is being squeezed by a regulatory crackdown.”

Cement, crude steel and pig iron production all rose from a year earlier in November, compared with a fall in the previous month. Output growth in steel, auto and telecommunications sectors accelerated from October.

The strong industrial figures aligned with the surprising improvement seen in other factory indicators in November, including purchasing managers indexes, which suggested government support is helping domestic demand, even as exports and producer prices shrank.

Japanese construction machinery maker Komatsu Ltd. said its machine usage hours in China rose for the first time in eight months in November, echoing the trends seen in the PMIs.

Retail sales rose 8 percent year on year in November, compared with an expected 7.6 percent, buoyed by stimulus measures and the November Singles Day shopping extravaganza, the statistics bureau said.

Fixed asset investment showed few signs of improvement, growing 5.2 percent from the January-November period, in line with the increase seen in the first 10 months, which was the weakest in decades.

Infrastructure investment growth, a key driver of activity, slowed to 4 percent in the January-November period from 4.2 percent in the first 10 months.

China will keep economic policies stable while making them more effective in 2020 to help achieve its annual growth target, media reported last week following a top economics meeting.

(SD-Agencies)