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  • Employees work at a production line of lithium ion batteries inside a factory in Dongguan, China, Oct.16, 2018.

    Employees work at a production line of lithium ion batteries inside a factory in Dongguan, China, Oct.16, 2018. | Photo: Reuters

Published 14 November 2018
Opinion

From September to October, Chinese industries grew faster than expected, suggesting that government policies are prompting positive results.

China National Bureau of Statistics (NBS) said Thursday that the country’s industrial production increased 5.9 percent in October, although it was only expected to grow 5.7 percent compared to September.

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The Service Sector output index grew by 7.2 percent year-on-year, with information transmission, software and information technology services, leasing, and business services keeping a fast growth.

The growth of investment in fixed assets in China accelerated to 5.7 percent in the period between January and October.

Despite those figures, China's economy is increasingly facing internal and external pressures, which are related to both more stringent regulations on high-risk loans and the Donald Trump administration trade war that threaten its exports.

While China's exports to the United States have been resilient so far, they could fall by 2019 if the U.S. imposes much higher tariff levels in January. 

The interannual growth rate of the China's international trade increased 22.9 percent in October. The total value of exports enhanced by 20.1 percent, and the total value of imports grew 26.3 percent, according to the information released by the NBS.

However, business surveys show that factories’ export orders, which is an indicator of future economic activity, have been shrinking for months. Retail sales slowed more than expected, while real estate investment growth dropped to a 10-month low in October.

Facing the weakest growth since the global financial crisis, Chinese officials are speeding up road and rail projects, pressuring banks to increase lending and cutting taxes to prevent any decline in the country's economic prospects.

Generally speaking, the national economy registered progress while maintaining stability in October, keeping the good momentum of long term development. However... We should make continuous efforts to... maintain stability in areas like employment, financial sector, foreign trade, foreign capital investment, and market expectation", concluded the NBS report released on Thursday.

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