China's Industrial Production and Retail Sales Exceed Expectations in September

China's industrial production and retail sales both surpassed forecasts in September, indicating signs of improving economic momentum, according to data released by the National Bureau of Statistics on Monday. Industrial production increased by 5.5% year-on-year, outpacing economists' predictions of 5.4% and rising from 5.2% in August. Retail sales of consumer goods rose by 1.1%, significantly higher than the expected 0.5% and up from 0.4% in the previous month.

The yuan strengthened against the U.S. dollar, with the USD/CNY pair down 0.1% and the USD/CNH pair decreasing by 0.04%. However, Chinese stock markets saw declines, with the Shanghai Shenzhen CSI 300 falling by 0.2% and the Shanghai Composite down by 0.3%.

Growth in industrial production was supported by an improvement in manufacturing activity, as evidenced by the NBS manufacturing purchasing managers' index, which rose to 50.1 in September from 49.8 in August. This figure indicates a return to expansion, moving above the crucial 50-point mark.

China’s gross domestic product (GDP) grew by 4.5% year-on-year in the third quarter, exceeding expectations of 4.4% and accelerating from a 4.3% growth rate in the previous quarter. On a quarter-on-quarter basis, GDP growth improved to 1.2% from 0.9%, also surpassing forecasts.

Despite these positive indicators, consumer demand appears to be relatively subdued. For the first nine months of the year, retail sales of consumer goods grew just 1.1% year-on-year, while combined sales of goods and services increased by 2.6%. Services sales rose by 5.0%, outpacing the 1.0% growth seen in goods sales.

Investment continues to lag, with fixed-asset investment down by 7.2% year-on-year for the January-September period, matching the decline recorded from January to August. Investment in real estate development plummeted by 20.6% in the first nine months, highlighting the ongoing impact of China's property downturn.

The urban surveyed unemployment rate improved slightly to 5.2% in September from 5.3% in August, better than the expected 5.3%.