China's economic growth seems to have accelerated for the first time in two years towards the end of 2012 thanks to the stimulus measures implemented by the government.

Chinese gross domestic product expanded at a 7.9% year-on-year pace in the last three months of 2012, ahead of the 7.8% expected by the consensus.

In a similar vein, industrial production rose by 10.3% year-on-year in December, ahead of the 10.1% rate foreseen by the consensus. Retail sales also performed better than expected, rising by 15.2% versus economists´ expectations for a 14.9% pace of expansion, the largest rise since March.

Urban fixed investment increased by 20.6% year-on-year, a shade below the 20.7% rise which had been foreseen.

In reaction to the data economists at Nomura are telling clients that: "This data set reinforces our view that the growth recovery is on track. We expect GDP growth to strengthen further in the first quarter of 2013 to 8.2%."

In fact, their Chief China Economist, Zhiwei Zhang, expects the authorities to focus more on controlling the risks from inflation and shadow banking.

AB

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