Chinese factory output strengthens

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Chinese factory output strengthens

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More signs have emerged that China’s economy might be stabilising after two years of slowing growth.

Industrial output rose 9.7 percent in July, which was above expectations.

At the same time it was announced that fixed-asset investment, which is an important driver of economic activity, rose 20.1 percent in the first seven months from the same period last year.

This follows surprisingly strong import and export numbers.

The run of upbeat economic data has eased concerns about a too fast slowdown in China, which could have derailed the fragile growth underway in the United States and hopes of a European recovery,

Last month retail sales grew 13.2 percent while inflation held steady at June’s 2.7 percent level, that is below the official 3.5 percent target for the year.

Producer prices fell for the 17th straight month, reducing inflation pressures.

China’s leaders will take heart from the positive indicators. They have been resisting pressure to stimulate the economy and want to focus instead on longer-term reforms to make the economy less export dependent.

The government has made clear it will accept some slowdown as it pushes through its reforms, but has also expressed confidence of meeting its 7.5 percent growth target this year – which would be China’s slowest growth in 23 years.