Chinese industrial output surged in November to its fastest pace since June 2007, underlining the economy's brisk recovery from the global downturn and accompanying the return of consumer inflation and import growth.
But exports continued to fall from year-earlier levels, contrary to forecasts of a return to growth, feeding into economists' expectations that the central bank will not be keen to tighten monetary policy significantly in the next few months as it waits to see how external demand holds up.
Overall, the results drive home both the solidity of China's contribution to global economic recovery and the looming prospect across the world that rising prices, especially for food, could crop up as policymakers' next big challenge.
Hong Kong shares led a rally across much of the region, closing up 0.9 per cent, with banks and property firms among the biggest gainers. The strong performance also supported oil prices, which rose to near $71 after earlier dipping below $70 for the first time in two months.
"This is a strong set of figures. But we expect no policy change during the first quarter next year," said Lin Songli, an analyst with Guosen Securities in Beijing.
Factory output rose 19.2 per cent from a year earlier, beating economists' expectations of an 18.0 percent rise and picking up from 16.1 per cent in October.
Consumer prices rose in November over a year earlier after nine straight months of declines. The increase of 0.6 per cent beat expectations of a 0.4 per cent rise.
Some of the biggest beneficiaries of the continuing strength in the world's third-largest economy are the countries in Asia and elsewhere that ship raw materials and components to China to feed its investment boom.
Imports jumped 26.7 per cent in November from a year earlier, ending the 12-month streak of declines and beating expectations of a 20 percent increase.
"I think this is partly reflected in the very good growth in heavy industries. I would expect that imports of commodities and raw materials continue to be strong," said Tao Wang, economist with UBS in Beijing.
Iron ore imports rose 57 per cent from a year earlier and 12 per cent compared with October.
Overall imports from Taiwan rose 52.2 per cent from a year earlier, while those from South Korea were up 39.2 percent.
Reuters