China joins rest of world with positive start to fourth quarter

There were signs over the weekend that China's economy maintained momentum at the start of the fourth quarter.

Data from the National Bureau of Statistics on Saturday showed that industrial production rose 10.3 percent in October from the previous year, up from the 10.2 percent increase in September.

Retail sales rose 13.3 percent in October from the previous year, the same as in September.

However, fixed asset investment rose 20.1 percent in the first 10 months of the year compared with the same period last year, down from 20.2 percent for the first nine months of the year.

Together with a report on Friday showing that China's exports rose 5.6 percent in October from the previous year after falling 0.3 percent in September, the data on Saturday suggest that China's economy has maintained its growth momentum at the start of the fourth quarter.

As the economy maintained momentum, though, so did inflation.

Another report on Saturday showed that the consumer price index rose 3.2 percent in October from the previous year, higher than the 3.1 percent increase in September.

Nevertheless, consumer price inflation is unlikely to be a major concern for China's policy-makers. Inflation for the first 10 months of the year averaged 2.6 percent, well below the government's full-year target of 3.5 percent, and the producer price index fell 1.5 percent in October from the previous year.

With the positive data from China towards the end of the week, its economy joined the rest of the world in showing a positive start to the fourth quarter.

Earlier in the week, a report from Markit Economics had shown that the JPMorgan global all-industry output index rose to 55.5 in October from 53.6 in September. The improvement was driven largely by an acceleration in growth in the non-manufacturing sector in the United States.

Indeed, other reports last week showed that the US economy also had a positive start to the fourth quarter. Non-farm payrolls increased by 204,000 in October, better than the 163,000 increase in September, and the Conference Board's US leading economic index rose 0.7 percent in September.

Leading economic indicators also rose in Japan. A report last week from the Cabinet Office last week showed that its index of leading indicators jumped to 109.5 in September from 106.8 in August.