Growth of industrial added value and imports both dropped to 14.7 per cent in October from 16.1 per cent and 22 per cent respectively in September.

"We are not worrying about a slowdown of the whole economy," said Qu. "This is because consumption is rising to sustain China's relatively rapid economic growth."

China's retail sales jumped 14.3 per cent from the previous year to 699.8 billion yuan (US$89.1 billion) in October, the fastest pace in almost two years.

The growth of retail sales for the first half of the year was 13.3 per cent. It rose to 13.7 per cent in July, 13.8 per cent in August and 13.9 per cent in September. Retail sales for the first 10 months stood at 6.2089 trillion yuan, up 13.6 per cent on the previous year.

The pick-up of domestic consumption is closely related to fast income growth and low inflation.

Per capita disposable incomes in towns and cities increased 10 per cent in the first nine months from the same period last year, and rural incomes jumped 11.4 per cent.

Meanwhile, China's consumer price index, the key inflation gauge, increased only 1.4 per cent in October, lower than the expected 1.6 per cent.

"The government's policy to boost consumption will show better results next year," said Yao Jingyuan, chief economist of the National Bureau of Statistics, at a recent business forum.

The surge in China's trade surplus is more surprising.

October witnessed a monthly trade surplus record of US$23.8 billion. The country's foreign trade in the first 10 months rose 24.1 per cent year-on-year to hit US$1.425 trillion, surpassing the volume for the whole of 2005.

And the Commerce Ministry forecast that the country's overall trade surplus will soar to a record US$150 billion this year, nearly 50 per cent above the 2005 level.

As a global manufacturing centre, China is bound to reap profits from processing trade.

But the country is definitely not in pursuit of a trade surplus. China will step up reforms of its economy to counter politically contentious trade imbalances, President Hu Jintao told world business leaders attending an economic conference in Hanoi last month.

1

2

(For more biz stories, please visit Industry Updates)