MNI POLICY: China's Recovery Needs Policy Continuity: Official

China's Q4 GDP is expected to rise above trend following Q3's 4.9% pace and the economy may see a relatively fast growth rate next year due to the low base this year, said Fu Linghui, the spokesman of the National Bureau of Statistic at a briefing on Tuesday, adding that the recovery would need continuity and effectiveness of policies.

"Any policy adjustment should be targeted," said Fu, when asked if monetary and fiscal policies should gradually be normalised amid the strong growth expectations.

In the next phase, consumption will still be the main driver of the economy with greater employment and higher incomes, Fu added.

PRICES

Spending on discretionary goods such as communication equipment, cosmetics and jewelry continued to grow more than 20% in November. Online retail sales grew 15.7% in the January-November period while the decline in retail sales at physical stores narrowed by 1.5%, according to Fu.

Recently introduced policies encouraging car sales in rural areas and the replacement of aging home appliances will also support the recovery in consumption, said Fu.

Consumer prices, which fell 0.5% y/y in November for the first time in 11 years, will return to a reasonable level as demand is expanding, said Fu, when asked if China faces the risk of deflation. He attributed the November showing to declining pork prices and said prices would stabilise with the recovery in hog production.