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Growth in China's industrial production slowed to 10% on year in November from 10.3% in October and just missed consensus of 10.1%.
However, retail sales accelerated to +13.7% from +13.3% and topped forecasts that were also +13.3%.
Urban investment, an indicator of construction spending, +19.9% vs +20.1% and +20%.
The mixed data comes as Chinese officials start an annual central economic work conference, where they will set goals and policies for next year. Last month, the country's leaders agreed on a massive reform program aimed at liberalizing and re-balancing the economy.
China’s CPI will likely break below 3% in December and fluctuate towards mid-2% in Q1, Reorient analyst Steve Wang notes. CPI eased to 3% in Nov. as food inflation slid to 5.9% from 6.5%. "Unless food prices, especially meat and vegetables, surge beyond reason during the coming holiday season... China faces minimal inflation risk in the months ahead."
"Non-food CPI was again a non-event at 1.6%, but the strong housing market is beginning to sting, with rental inflation edging higher to 4.7%, the highest in nearly a year and half," suggesting policymakers will likely maintain existing curbs on property markets in order to stem the spillover effect of high housing prices on inflation.
China's trade surplus increased to the highest level in nearly five years in November, rising to $33.8B from $31.1B in October and easily topping consensus of $21.7B.
Exports climbed 12.7% on year vs +5.6% in October and exceeding forecasts of +7.1%.
Imports grew 5.3% vs +7.6% and +7.2%.
Exports to Europe +18.4% and to the U.S. +17.7%.
"There are signs that the global activity and trade cycle is gaining momentum, driven by the recovery in high income countries, and China's exporters are benefiting from that," says RBS economist Louis Kuijs.
The data is the first in a number of reports due out this week, including inflation, industrial production and retail sales. (PR - use Google to translate)
The Direxion Daily China 3x Bull (YINN) and Daily China 3x Bear (YANG) ETFs will switch from their current index, the BNY Mellon China Select ADR Index, to track the FTSE China 25 Index as of December 12.
“FTSE provides benchmarks for more than 60 percent of assets tracking China-themed, U.S.-listed ETFs, and we’re delighted by Direxion’s adoption of the FTSE China 25 Index,” said Jonathan Horton, President of FTSE North America and Head of FTSE’s Exchange-Traded Product Service Unit, in a statement.
YINN and YANG will be joining the iShares China Large-Cap ETF (FXI), which is not only the largest China ETF trading in the U.S., but also the only other fund tracking the FTSE China 25.
Very little "China upside" has been priced in, says Goldman analyst Noah Weisberger, noting Asian-focused funds are "significantly underweight" China. His team is forecasting a big 19% gain in Chinese equities traded in Hong Kong next year.
Goldman is pairing its long-China call with a short on copper (JJC) due to "abundant supply and a lack of accelerating demand."
The long/short idea is #4 in Goldman's list of top trade ideas for 2014. Previous ideas are here.
China's official manufacturing PMI held steady at an 18-month high of 51.4 in November and topped consensus of 51.1.
However, the sub-index for smaller companies dropped to 48.3 from 48.5.
"The momentum we see is state-led and policy-led, and from that perspective, it is a mixed performance," says Conference Board economist Andrew Polk.
Export orders edged up to 50.6 from 50.4 in October. "The export order data suggests that global demand - key to the outlook for China's manufacturing - improved a bit," says RBS economist Louis Kuijs.
New orders slipped to 52.3 from 52.5.
Production and business activity expectations fell to 54.9 from October's 57.5.
Stocks of purchases contracted with a reading of 47.8, the lowest since July. "This indicates that the producers are not rushing to hoard raw materials due to lack of final demand," says ANZ Bank. (PR)
The heat over the islands dispute in the East China Sea has been turned up further, with China sending fighter jets and an early warning aircraft into an area that the country last week designated as an Air Defense Identification Zone.
China's action follows the U.S., Japan and South Korea sending military planes into the region without telling Beijing first, in defiance of the latter's directives that they should provide prior notification.
However, China also played down the threat of the military action it had threatened against aircraft that hadn't informed it of their intentions.
China and Japan lay claim to the islands, which are known as Senkaku in the latter country and Diaoyu in China. The last flare-up a year ago caused much damage to trade between the nations.
The U.S. has involved itself in the latest flare up of the islands dispute between Japan and China in the East China Sea by flying two unarmed B-52 bombers in the area without informing Beijing.
The U.S. moves comes after China included the islands - known as Senkaku in Japan and Diaoyu in China - in an Air Defense Identification Zone, and warned that it would take military action against airplanes flying in the region without notification.
Meanwhile, Japanese airlines have also defied Beijing and flown through the area without providing China with flight plans.
At stake in the row are fishing rights and access to up to 160B barrels of oil.
When the dispute first flared up a year ago, trade between China and Japan was badly hit, with the latter's car makers suffering in particular.
Chinese government-bond yields have continued to ease after hitting a nine-year high last Wednesday, when the rate on 10-year bonds reached 4.72%.
Today, the yield is -5 bps at 4.66%.
The spike in yields has come as the government tightens monetary policy in order to try to rein in soaring lending. The trend has led to increased borrowing costs in the wider economy and made it more difficult to tap the bond markets.
That has led to fears that China's economic rebound could be at risk.
"If borrowing costs don't fall in time, whether the real economy could bear the burden is a big question," says Nomura economist Wendy Chen.
The HSBC Chinese flash PMI has slipped to 50.4 in November from 50.9 and missed consensus that was also 50.9.
However, the output index has edged up to an eight-month high of 51.3 from 51.1.
PMI "moderated due to the weak new-export orders and slowing pace of restocking activities," HSBC said. "The muted inflationary pressures should enable Beijing to keep policy relatively accommodative to support growth."
Citigroup economist Ding Shuang says the recent growth rebound may have peaked. "Tighter credit conditions and reform measures will continue to weigh on investment and growth through next year," Ding says. Reforms could be slowed down if the risk of GDP growth falling below 7% "becomes material."
The Shanghai Composite is -0.2% and the Hang Seng is -0.35%. (PR)