China...industrial output strong; prices drop

China said that its industrial production and retail sales accelerated at a faster-than-expected pace, but consumer prices and producer prices fell more than anticipated. Industrial production for October surged 16.1% from a year earlier, outpacing a 15.5% rise forecast by economists, while retail sales climbed 16.2%. The consumer price index (CPI) fell 0.5% from a year-earlier period and the producer price index (PPI) shrank 5.8%, with each dropping more than economists' estimates but still showing an increase from the previous month's data. The growth in urban fixed-asset investments in the first 10 months of this year (January-October 2009) also slowed to 33.1%, easing from the 33.4% growth in the first nine months of 2009. The latest batch of economic reports underscore China’s rapid economic recovery, thanks in part to a huge stimulus package unleashed by the government. Car sales, for instance, have been booming (up by 72.5% in October) because of a cut in sales tax on new vehicles. But as in the US and Europe, experts are wondering what will happen when the stimulus measures end.