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China Factory Output Rises 19.2%, More Than Forecast (Update2) – Bloomberg.com Updated:New York, Dec 10 23:07London, Dec 11 04:07Tokyo, Dec 11 13:07 SYMBOL LOOKUP FEEDBACKHOMENEWSEXCLUSIVEWORLDWIDEREGIONSMARKETSINDUSTRIESECONOMYPOLITICSLAWENVIRONMENTSCIENCEOPINIONSPENDSPORTSARTS AND CULTUREEDITORS’ VIDEO PICKSBLOOMBERG MARKETS MAGAZINESPECIAL REPORTMARKET DATASTOCKSRATES & BONDSCURRENCIESMUTUAL FUNDSETFsCOMMODITIESECONOMIC CALENDARPERSONAL FINANCEJANE BRYANT QUINNJOHN DORFMANPORTFOLIO TRACKERCALCULATORSFINANCIAL GLOSSARYTV and RADIOBLOOMBERG Tiffany jewelriesTELEVISIONBLOOMBERG TELEVISION SYNDICATED REPORTSBLOOMBERG RADIOBLOOMBERG PODCASTSBLOOMBERG SHOWSCEO SPOTLIGHTCFO INSIGHTPORTFOLIO MATTERSMOBILEBUSINESSWEEKBUSINESS EXCHANGEBloomberg InnovatorsTechnologyCurrenciesForex Trading VideosETFsCEOCommoditiesExclusiveWorldwideRegionsMarketsIndustriesEconomyPoliticsLawEnvironmentScienceOpinionSpendSportsArts and CultureEditors’ Video PicksBloomberg Markets MagazineSpecial ReportRESOURCES Bloomberg TV Bloomberg Radio Bloomberg PodcastsBloomberg Press More News • Tankan Survey May Show Japan’s Recovery Is `Slipping Into a Standstill’ • Hatoyama Means Stocks Plummeting as Yen Rises With Unfilled Japan Mandate • Geithner Says Treasury Likely to See Losses on Bailouts of AIG, Automakers China Factory Output Rises 19.2%, More Than Forecast (Update2) Share Business ExchangeTwitterFacebook| Email | Print |A A A By Bloomberg News Dec. 11 (Bloomberg) — China’s industrial production grewmore than economists estimated in November, signaling astrengthening recovery in the world’s third-biggest economy. Factory output climbed 19.2 percent from a year earlier,the biggest increase since June 2007, and more than the 18.2percent median estimate in a Bloomberg News survey of 25economists. Consumer prices rose 0.6 percent, the first increasein 10 months, the statistics bureau said in Beijing today. A $586 billion stimulus package, record bank lending andincentives for purchases of cars and home appliances aresupporting industrial output, which will get another boost asexports recover. China’s government this week adjusted itsgrowth policies by extending subsidies for rural consumers andincreasing payments for automobile trade-ins, while scrapping atax break on property sales. “Beijing’s fine-tuning of stimulus measures shows thatit’s getting more comfortable with the economy’s recovery,”said Lu Ting, an economist at Bank of America-Merrill Lynch inHong Kong. “The government may start to exit stimulus viacurbing investment and loans from April.” The Shanghai Composite Index added 6.04, or 0.2 percent, to3,260.31 as of 10:08 a.m. local time, erasing a loss of as muchas 0.3 percent. Expect Stronger Yuan Twelve-month non-deliverable forwards were little changedat 6.6550 per dollar as of 10:23 a.m. in Hong Kong, indicatingtraders expect the yuan to strengthen 2.6 percent in a year,according to data compiled by Bloomberg. China’s growth accelerated to 8.9 percent in the thirdquarter, helping Asia to lead the recovery from the globaleconomic slump. “The Chinese economy is enjoying considerable momentum aswe head toward 2010,” said David Cohen, an economist withAction Economics in Singapore. “It’s consistent with theexpectation that Beijing may around the middle of next yeartolerate an appreciation of the currency to help containinflationary pressures.” November’s gain in industrial output was boosted by thecomparatively low level a year earlier, when exports and growthslumped after the collapse of Lehman Brothers Holdings Inc. Retail Sales Retail sales climbed 15.8 percent in November from a yearearlier, compared with 16.2 percent in October, tiffany silveraccording to thestatistics bureau. Urban fixed-asset investment rose 32.1percent in the January-to-November period from a year earlierafter climbing 33.1 percent through October, today’s data showed. Producer prices fell 2.1 percent last month from a yearearlier, after dropping 5.8 percent in October. While President Hu Jintao pledged this week to maintain a“moderately loose” monetary policy and a “proactive” fiscalstance, China’s banking regulator plans to slow new lending in2010, a person familiar with the matter said this week. The regulator aims for a limit of between 7 trillion yuanand 8 trillion yuan of loans for all of next year, the personsaid. The credit boom has raised the risk of asset bubbles andbad loans. Banks extended 9.21 trillion yuan of new local-currencyloans in the 11 months through November, the central bank saidtoday. New lending in November totaled 294.8 billion yuan, morethan the 250 billion yuan median estimate of economists. Overseas Investors Forecasts for China to maintain the fastest growth of anymajor economy are encouraging companies to boost production andspurring overseas investors to expand. China Petroleum & Chemical Corp., the country’s biggestrefiner, said this month that it plans to expand the capacity ofits second-biggest oil-processing plant by a third. BayerischeMotoren Werke AG, the world’s largest maker of luxury cars, saidlast month that it will build a new factory worth 5 billion yuanto tap an auto market set to overtake the U.S. as the world’slargest this year. The government is wrestling with overcapacity and excessproduction in some industries, such as steel, where anoversupply is depressing profits for mills including BaoshanIron & Steel Co. China’s cabinet and the nation’s top economic planner saidthis week that they will increase policy flexibility, manageinflation expectations and curb speculative property purchases.Property prices in 70 cities rose at the fastest pace in 16months in November and the benchmark Shanghai Composite Indexhas jumped almost 80 percent this year. Food and energy price increases helped to bring deflationto an end, said Sun Mingchun, chief China economist at NomuraHoldings Inc. in Hong Kong. Food Costs November’s 0.6 percent gain in consumer prices from a yearearlier was driven by a 3.2 percent increase in food costs,today’s figures showed. Non-food prices fell 0.7 percent.Consumer prices climbed 0.3 percent from the previous month. The government last month approved increases of as much as8 percent to gasoline, diesel and jet fuel prices and raisedretail power charges for the first time in 16 months. “The balance of risk is gradually shifting from growth toinflation,” said Tim