October inflation at eight-month high

Inflation rose in October to its highest level since February amid an increase in industrial output, but remained well below the government's annual target, official data released over the weekend showed.

The data for October added to evidence that the economy has further stabilized and reinforced the leadership's determination to restructure the economy as the Communist Party of China (CPC) kicked off a key meeting over the weekend to draw up a blueprint for reform in the next decade, analysts said.

The consumer price index (CPI). a major gauge of inflation, rose by 3.2 percent in October from a year ago, slightly up from 3.1 percent in September, the National Bureau of Statistics (NBS) said Saturday.

The October CPI was the highest since February, but still well below the government full-year target of 3.5 percent.

Food prices, which account for about one-third of the CPI calculation, declined by 0.4 percent month-on-month, the data showed.

"Although the CPI rose a bit higher than expected in October, food prices and rent remained stable. The inflation will not increase the pressure on macroeconomic policy adjustment so there will be no major change in macro policy," Zhang Liqun, a research fellow at the Development Research Center (DRC) of the State Council, a government think tank, told the Global Times on Sunday.

Industrial output jumped by 10.3 percent in October from a year earlier, accelerating from September's 10.2 percent, the NBS data also showed.

It was second highest figure for the year, after August's 10.4 percent growth, and above market expectations.

Retail sales, a proxy for consumer spending, grew by 13.3 percent year-on-year in October, the same as the figure for September.

Fixed-assets investment rose 20.1 percent in the first 10 months from a year earlier, slightly down from the level of 20.2 percent for the first nine months of the year.

"China's economy has stabilized and signs of economic decline have disappeared. An average 7 or 8 percent annual growth pattern has been established for the coming period," said Zhang of the DRC.

China's economic growth rebounded to 7.8 percent in the third quarter, quickening from 7.5 percent in the previous three months.

A raft of economic indicators released earlier this month also pointed to renewed strength in the economy.

Exports grew by 5.6 percent year-on-year in October, reversing a 0.3 percent decline in September, customs data showed Friday.

The official Purchasing Managers' Index, a barometer for the health of China's manufacturing activities, reached an 18-month high of 51.4 in October, led by strong output.

"The strong October data will reinforce the government's determination to restructure the economy," Li Xunlei, deputy CEO of Haitong Securities Co, told the Global Times Sunday.

"The pace of economic restructuring will be quickened after the Third Plenary Session of the 18th CPC Central Committee. Future economic growth will rely more on market-based mechanisms," Li said.