China's economy in for softer landing than expected, say analysts

BEIJING - China's industrial output rose faster in August than analysts estimated, signalling the world's third-biggest economy is maintaining momentum as growth moderates.

Production gained 13.9 per cent from a year earlier, more than the 13 per cent median estimate of 29 economists, a statistics bureau report showed in Beijing. Consumer prices jumped 3.5 per cent, the most in 22 months, as food costs climbed. Retail sales increased 18.4 per cent.

The data suggests domestic demand is withstanding curbs on bank lending and government crackdowns to cool the property market and meet energy and pollution targets.

Bank of America-Merrill Lynch forecasts gross domestic product will expand at least 9.4 per cent this quarter and 9 per cent in the final three months of the year, aiding the global recovery as rising unemployment caps United States growth.

"Domestic demand is robust and the Chinese economy is heading for a smoother and softer landing than people had feared," said Lu Ting, a Hong Kong-based economist at Bank of America-Merrill Lynch.

The consumer-price gain matched the median forecast in a Bloomberg News survey of 31 economists, and compared with the government's full-year target of 3 per cent.

China is poised to replace Japan as the world's second-biggest economy this year after reporting a larger GDP in the second quarter.

- BLOOMBERG

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