China’s batch of October data generally beat expectations. For starters, export growth was solid and broad based in October at 5.6% yoy compared to -0.3% yoy in September. Export growth to the US rebounded to 8.1% yoy in October up from 4.2% yoy the previous month and exports to the EU surged to 12.7% yoy after a disappointing -1% yoy in September. Import growth was unchanged at 7.6% yoy. As for industrial production and retail sales, growth in October remained solid. The former increased to 10.3% yoy up from 10.2% yoy, while the latter was unchanged at 13.3% yoy. Fixed investment edged down to 20.1% yoy from 20.2% yoy. The details suggest that infrastructure and real estate investment are slowing down, making way for investment in manufacturing. Overall, the activity data point to upside risks to our GDP forecast of 7.5% for 2013, while they support our forecast of a firming of growth to 8% in 2014, mainly on the back of a strong demand from the advanced economies. Going forward, positive data could make China’s leaders more confident to introduce more in-depth economic reforms in the financial system and the tightly controlled capital account. Meanwhile, consumer price inflation rose to 3.2% in October up from 3.1% in September, mainly as a result of higher food prices. This is still below the government’s target of 3.5%, but the rising trend in consumer and property prices in the past months have put China’s central bank on guard. Indeed authorities have been trying to refrain from liquidity injections, while signalling a more prudent monetary policy stance.