China showed signs of relaxing cooling measures in the property market as it allowed companies to have refinancing while the economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution.
Beijing is already in the second year of a campaign to reduce high levels of debt as authorities worry that riskier lending practices, especially in the real estate sector, could imperil the economy.
Data released yesterday suggested policymakers are making progress in defusing financial risks by weaning China off its years-long addiction to cheap credit, and signaled moderating growth over the next few quarters.
Industrial output rose 6.2 percent year-on-year in October, the National Bureau of Statistics said, missing analysts' estimates of a 6.3 percent gain and lagging a 6.6 percent increase in September.
Fixed-asset investment growth also slowed to 7.3 percent in the January- October period, from 7.5 percent in the first nine months. Analysts had expected an increase of 7.4 percent.
"The moderation in activity data released yesterday suggests that growth slowed in October and adds to our conviction that it will continue to do so in the quarters ahead," Nomura analysts wrote in a note to clients.
In the property sector, China's October property sales and new construction starts fell in October as the property market cooled from a two-year boom in the face of a tighter liquidity environment and a crackdown on riskier lending.
Real estate investment growth also cooled in October, in line with expectations, as the government seeks a soft landing for the property sector amid a gradual slowdown in the economy.
Real estate, which directly affects 40 other business sectors in China, is a crucial driver for the economy but also poses a major risk as Beijing looks to tame soaring home prices without triggering a crash.
Property sales by floor area fell by 6 percent in October from a year earlier, compared with a 1.5 percent decline in September, according to Reuters calculations. The decline was the biggest since the first two months of 2015.
"[That decline] is exactly what the government is looking for," said Jonas Short, head of investment bank Sun Hung Kai Financial's Beijing office.
Sales by value fell by 1.7 percent on- year in October.