Let’s take the good numbers first. The November industrial production came out better than expected, but honestly, mainly due to domestic demand. Normally it’s a healthy sign if the import is rising as well, and it did above expectations. All in all, taken as positive by the market.

Some say that the rebound is on track, I judge it more like stability, like mentioned several times. The domestic demand is pushed and forced higher by the public stimulus package. That the domestic Chinese demand is growing stable will not help the rest of the world, as the outside world cannot produce as cheap as the Chinese companies can. There is no “save the world effect” in these numbers. The higher import is more due to higher commodity prices, so no happy days there.
It leads to the inflation number, higher than expected (+0,6% y/y). Also in China many have pointed at the very loose monetary policy and the risk of higher inflation. So far the change from deflation to inflation was only caused by higher food prices. That has never been seen as positive in any country, and one should keep an eye on this, as food inflation in China is very critical.
The last, but very important export data, disappointed (-1,2% y/y). More was expected based on the hope of increasing global demand.
It still gives me the ongoing picture of China being stable, partly due to stimulus, and not rebounding in any significant way. The global demand is still on hold and that inflation is coming to town just before Christmas – watch India as well.
The bulls are still in the lead and will try to use the above numbers as a buy opportunity, but it should be over by Monday. The numbers are not a reason to buy more stocks, sorry to say.

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