Encouraging data from China on Tuesday pointed to robust second-half growth and helped dispel concern that the economy is addicted to government infrastructure expenditure.
The National Bureau of Statistics reported stronger-than-expected year-on-year growth in both industrial production and retail sales in August. These were up 6.3% and 10.6%, respectively, compared with 6.0% and 10.2% growth in July.
Most types of industrial output expanded healthily, though mining output fell by 1.3% on the year. Within retail, sales in urban areas both grew by more than 10%. And double-digit growth in sales of big-ticket items, including cars and furniture, and of home improvement materials, pointed to consumer confidence about the outlook
The National Bureau of Statistics said fixed asset investment growth in the first eight months of the year remained unchanged from the seven-month level of 8.1%, though Capital Economics noted that the report showed private sector investment is recovering after a slow start to the year.
The NBS figures came as a relief after the same bulletin for July disappointed. They follows good news from Caixin/IHS Markit's August services purchasing managers' index and from a government PMI for the manufacturing sector and a trade bulletin. Together the indicators point to a second half pickup in economic growth, rather than the decline originally expected, after the economy expanded by 6.7% in the first and second quarters, powered by government investment.
"The upshot is that today's data fits with our long-running view that the delayed impact of earlier policy easing means that a stronger second half to this year is likely," said Capital Economics' China economist Julian Evans-Pritchard. "Admittedly, with further monetary easing unlikely in the near-term, this uptick in economic activity is likely to fizzle out going into next year. Nonetheless, the latest evidence of a pick-up suggests that recent concerns that policy easing had failed to provide any noticeable boost to the economy were likely somewhat premature."
Asian stocks, including Chinese benchmarks, were mixed on Tuesday amid fears about a Fed rate rise and concern about potential inaction from the Bank of Japan. Both will make monetary policy calls on Sept. 21.
Towards the end of the trading day the CSI 300 composite index was down 0.36% to 3,250.86. But the tech-heavy Shenzhen Composite was up 0.33% at 1,983.49.
In Hong Kong the Hang Seng was up 0.53% at 23,413.09.
In Tokyo the Nikkei 225 closed up 0.34% at 16,729.04 and the Topix was down 0.01% at 1,322.99.
Chip maker Renesas closed up 2.2% in Tokyo after it arranged to buy Milpitas, Calif. peer Intersil (ISIL) for $3.2 billion. Renesas will pay $22.50 per share for Intersil, which closed on Nasdaq on Monday up 2.1% at $19.76.
West Texas intermediate was recently down 1.2% at $45.72 a barrel.
U.S. futures were down, with Dow Jones mini futures down 0.46% and S&P 500 mini futures down 0.45%.