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November 7, 2009

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Home » Business » Economy

Bullish Chinese data expected

CHINA'S key economic data for last month, due to be released next Wednesday, will provide fresh evidence of an accelerated recovery in the world's third-largest economy, with a narrower drop in trade and a faster expansion in industrial output, analysts said.

But it is still too early for the country to consider shifting from its relatively loose fiscal and monetary policies, they said.

"China's economic recovery is firmly on track," said Wang Qing, an economist of Morgan Stanley. "Although growth is still primarily driven by policies, a recovery in private sector investment is under way and an export rebound is imminent."

China's exports, the hardest hit sector by the global financial crisis, declined at a slower pace in recent months after external demand stabilized. In September, China's overseas shipments fell an annualized 15.2 percent, the smallest drop so far this year.

Wang forecast the decline in exports will further ease to 13.2 percent last month, and may rise again in the first half of next year.

The 106th China Import and Export Fair, which ended on Wednesday in Guangzhou, Guangdong Province, registered an 16.2-percent increase in export deals worth more than US$30.4 billion compared with the previous fair held in the spring of this year.

Lu Zhengwei, an analyst of the Industrial Bank Co, said faster growth in manufacturing will fuel China's recovery while domestic consumption and investment will stay stable.

"We expect the growth of China's industrial production may climb to a 16-month high of 15.5 percent in October," Lu said in a research note.

China's Purchasing Managers Index, a harbinger of the nation's manufacturing activities, rose at the fastest pace in 17 months last month. It grew to 55.2 last month from September's 54.3, a sixth consecutive increase.

The World Bank has raised its forecast for China's economic growth this year to 8.4 percent from 7.2 percent.


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