AI Sentiment: Bullish
Reason: China's industrial output surpassed expectations with the strongest growth since December 2019, indicating a steady recovery from the COVID-19 impact. Despite potential risks, the robust industrial output data highlights the resilience of China's economy.



In November, China's industrial output rose by 5.4%, surpassing expectations, marking the strongest growth since December 2019 and indicating a steady recovery from the COVID-19 impact. Economists had initially forecast a 5.0% increase following the 4.9% gain in October.

The strong industrial output was supported by robust demand both locally and abroad, despite the power consumption restrictions and supply chain disruptions. The data from the National Bureau of Statistics (NBS) showed that the high-tech and equipment manufacturing sectors were the main drivers of growth, with an increase of 13.4% and 11.4% respectively.

Meanwhile, retail sales, a key gauge of consumer confidence, rose 3.9% from a year earlier, below the predicted 4.7% increase but still higher than the 4.3% rise in October. Consumption has been recovering at a slower pace compared to industrial output due to the Chinese government's zero-COVID policy that has led to occasional lockdowns.

Investment in fixed assets, excluding rural households, grew by 1.5% in the first eleven months from the same period a year earlier, which was less than the forecasted 1.9% and the 1.8% gain from January to October. The slower growth in fixed-asset investment was partially due to the government's campaign to curb debt in the property sector.

Despite the better-than-expected industrial output, some economists warn that the outlook remains uncertain given the ongoing problems in the property market and the potential risk of a resurgence in COVID-19 cases.

However, China has been largely successful in keeping the pandemic under control, and with the global economic recovery, its export sector is likely to maintain growth. Overall, the robust industrial output data underscores the resilience of China's economy in the face of various challenges.