Boost for markets as China’s economy shows signs of bouncing back

China delivered a welcome boost to the world’s economy on Saturday with figures showing business at its factories growing at its highest rate for five months. The unexpectedly positive data was seen as a sign that a flurry of moves to rejuvenate its flagging economy may be working. Industrial output increased 6.2% last month from a year ago, the National Bureau of Statistics said. It was the first increase since August and well up on October’s figure. That will be seen as good news for markets around the world, which have been badly hit by the slowdown in the world’s second-biggest economy.

While low base could be the factor driving the headline growth, we still have to acknowledge that China’s data are illustrating signs of stabilization, albeit at a low level.

Zhao Hao, senior economist at Commerzbank

China has been hit by weak demand at home and abroad leading to factories producing too many goods, driving prices down around the world. The latest data came after weak trade and inflation readings earlier this week, which underscored the persistent slack in the economy. But the new data also showed growth in fixed-asset investment, one of the main drivers of the economy, was faster than expected, while retail sales grew by 11.2% in November.

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