In August, China's industrial output and retail sales grew at a faster-than-expected pace, but property investment fell further and may drag on broader demand even as the recent flurry of support policies showed signs of stabilizing the economy.
Industrial output, released by the National Bureau of Statistics on Friday, rose 4.5 percent from a year earlier, accelerating from the 3.7 percent pace seen in July and came above expectations for a 3.9 percent increase in a Reuters poll of analysts. In August, retail sales, a measure of consumption, increased 4.6 percent at a faster rate than the summer travel season, and was the quickest growth since May. That compares with an expected 3 percent increase in July and a 2.5 percent increase in July.
The upbeat data suggest that a flurry of recent measures, such as property support policies to shore up a dwindling economic recovery, are beginning to bear fruit.
The Chinese yuan, against the dollar, surged to a two-week high.
But analysts say the recovery is far from sure-footed.
Friday's data was greeted by better-than-expected bank lending figures, narrowing exports and imports declines as well as easing deflationary pressure.
In August, the country's passenger vehicle sales were up in August from a year earlier, as higher discounts and tax breaks for environmentally friendly and electric vehicles boosted consumer sentiment.
To sustain the recovery momentum, China's central bank said on Thursday that it would cut the amount of cash that banks must hold as reserve for the second time this year to boost liquidity. Earlier this month, the bank rolled over maturitying medium-term policy loans to add more liquidity into the financial system, while retaining the interest rate unchanged.
But analysts note that an ailing property sector, high youth unemployment, uncertainty surrounding household consumption and rising Sino-US tensions over trade, technology and geopolitics have raised the bar for a sustainable economic recovery in the near future.
Ng said confidence remains the root of most problems requiring larger 'constructive policy and regulatory changes' to boost growth momentum.
The once mighty property sector remains a drag on the $18 trillion economy, with the country's largest private developer, Country Garden, the latest to slide because of liquidity squeeze.
For August, property investment extended its fall, down 19.1 percent year-on-year from a 17.8 percent slump the previous month, according to Reuters calculations based on NBS data.
Moody's on Thursday removed China's crisis-hit property sector outlook to negative from stable, expecting contract sales to drop by about 5 percent over the next six to 12 months.
In the first eight months of 2023, fixed asset investment increased 3.2 percent from the same period a year earlier, versus expectations for a 3.3 percent increase. In the first seven months of the year, it grew 3.4 percent.
An uncertain business climate meant businesses remained wary about hiring, but the National Jobless Rate improved a touch to 5.2 percent in August, slightly down from 5.3 percent in July.