More positives than negatives in October data

The latest round of Chinese data was met with plenty of gloomy headlines. We think these were overdone. The cloud over China’s economy may not have lifted but there were more positives than negatives in the October figures. Industrial output growth edged down and the contraction in export values deepened. But import and investment growth rebounded and retail sales growth hit a ten-month high. Perhaps more important, credit growth and fiscal spending are looking increasingly strong, which should help support economic activity. The upshot is that we continue to believe that conditions will get better rather than worse over the coming quarters.