* Oct industrial output +9.6 pct y/y vs +9.4 pct f'cast
* Oct retail sales +14.5 pct y/y vs f'cast +14.0 pct
* Jan-Oct fixed asset investment +20.7 pct y/y vs f'cast
* Oct CPI +1.7 pct y/y vs f'cast unchgd from Sept +1.9 pct
* PPI -2.8 pct vs f'cast -2.7 pct and -3.6 pct in Sept
By Nick Edwards and Kevin Yao
BEIJING, Nov 9 China's annual industrial output
growth quickened more than expected in October and fixed asset
investment also ticked higher, cementing investors' expectations
of a modest rebound in the final three months of 2012.
The data, key barometers of both domestic activity and
output from China's export-oriented factory sector, offered
further evidence that a cyclical recovery gained strength last
month after the world's second largest economy suffered the
slowest period of growth since early 2009 in the third quarter.
"October industrial output growth beat market expectations
and confirmed a recovery trend," said Jiang Chao, an analyst at
Guotai Junan Securities in Shanghai.
"But given the uncertainties in the outside world, we expect
the recovery momentum to be limited and the full-year industrial
output is likely to be around 10 percent for this year."
October saw a 9.6 percent year-on-year rise in industrial
output, an improvement on the 9.2 percent growth achieved in
September and ahead of the 9.4 percent consensus forecast from a
Year-to-date fixed asset investment rose an annual 20.7
percent, a touch faster than the 20.5 percent reported for
January-September and just ahead of the 20.6 percent forecast
Retail sales also beat forecasts, rising 14.5 percent last
month from a year ago, which compared to predictions of 14
percent and September's 14.2 percent reading.
The consensus view among economists is that a seven-quarter
long cyclical downturn in China's growth ended in Q3, when it
dipped to 7.4 percent year-on-year.
A tepid rebound to 7.7 percent is anticipated in Q4, with
its mild nature restraining many investors from making
aggressive turnaround bets, as evidenced by 10 of the 27
analysts polled by Reuters having forecasts below the median.
Data released earlier in Friday showed consumer inflation
eased to its slowest pace in nearly three years in October,
giving policymakers scope to further loosen monetary policy if
needed to support growth in the world's second-biggest economy.
The consumer price index (CPI) rose 1.7 percent from a year
ago, slower than the 1.9 percent posted in September. Economists
polled by Reuters had expected inflation to hold steady.
Factory-gate prices in October fell 2.8 percent from a year
earlier, a touch faster than the forecast fall of 2.7 percent
but easing from September's 3.6 percent annual drop, which bodes
well for a corporate sector struggling to cope with falling
profits due to producer price deflation.
The headline consumer price index reading was the lowest
since January 2010.
"I don't expect any easing in monetary policy until the end
of this year because it would be unnecessary as the economy is
recovering," Yao Wei, China economist at Societe Generale in
Hong Kong, told Reuters.
Beijing has been fine-tuning economic policy for a year to
support growth, and analysts expect that programme to broadly
remain in place after a new leadership of the ruling Communist
Party is unveiled at a congress that began on Thursday.
Outgoing party chief, President Hu Jintao - almost certain
to be succeeded by Vice President Xi Jinping - said in a speech
to the congress that China would stick to policies fostering
sustainable, long-term economic development with the aim of
doubling GDP over the 10 years to 2020.
China has cut benchmark interest rates twice this year,
lowered bank reserve ratios three times since late 2011 and made
repeated, large-scale liquidity injections into the financial
system to underpin slowing growth in the short-term.