Exports grow and consumer prices are up by 0.6 instead of 0.4 per cent as experts forecast. Retail sales rise, sign of a good domestic market, but the authorities fear banking bubble might burst and so are planning to scale down stimulus package.

Beijing (AsiaNews/Agencies) – Despite the worldwide financial crisis, China is showing new signs of economic recovery with its industrial output surging and its export slump easing. Consumer prices grew year-on-year in November for the first time in 10 months by 0.6 per cent, beating expert expectations of 0.4 per cent. Industrial output rose to its strongest position since June 2007, whilst November's year-on-year exports fell only by of 1.2 per cent, the slowest of 2009.

China’s National Bureau of Statistics (NBS) said that retail sales were up 15.8 per cent in November compared to the same time last year.  A “mild rise in prices during economic recovery is actually conducive to economic growth and job creation,” NBS spokesman Sheng Laiyun said.

Earlier this week the Chinese government said it would keep its current fiscal and monetary stance for the moment but would crack down on new investments and credit.

Despite the "strong set of figures", there was no expectation of any policy change during the first quarter of next year , said Lin Songli, an analyst with Guosen Securities in Beijing.

Although new lending by banks rose to US$ 43.17 billion in November, this was still less than the US$ 75.7 billion lent in September.

However, the numbers are not all that comforting for central government economists who fear overexposure by banks. The latter guarantee low interest loans to firms with limited collateral. If the bank system should break, the crisis could get worse than it is now.

The State Council said this week that the government will re-impose a sales tax on homes sold within five years after cutting the period to two years. It will also extend subsidies for rural consumer purchases. Both measures should generate profits from real value. Taxing housing means imposing a sort of mortgage, whilst rural consumption is based on farmers who can rely on real property to back bank loans.

“Beijing’s fine-tuning of stimulus measures shows that it’s getting more comfortable with the economy’s recovery,” said Lu Ting, an economist at Bank of America-Merrill Lynch in Hong Kong. “The government may start to exit stimulus via curbing investment and loans from April.”

An inside source said that China’s banking regulator plans to slow new lending to between 7 trillion yuan and 8 trillion yuan next year. In the first 11 months of this year, loans reached 9.21 trillion yuan.

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• economy
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