INDUSTRIAL production in China expanded 4.5 per cent in August year on year and up from a 3.7 per cent increase in July, according to official data reports Nikkei Asia.

This hints at a stabilisation of the economy, which has been lacklustre over the past several months.

The National Bureau of Statistics also said August's retail sales of consumer goods, an indicator of household spending, grew 4.6 per cent year on year, up from July's 2.5 per cent growth.

The latest monthly economic performance figures come as credit grows sharply, with outstanding yuan-denominated loans jumping to CNY1.36 trillion (US$188.63 billion) in August, up from CNY345.9 billion in July. Policy support was among the likely reasons for the rise in corporate lending and bond issuance.

Deflationary pressure eased after the consumer price index inched 0.1 per cent higher in August, reversing a 0.3 per cent contraction in the previous month, while the decline in exports and imports also slowed in August.

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