Chinese industrial production rose 4.5 percent on the year in September as it did in August, just above the consensus forecast for an increase of 4.3 percent. Solid growth in industrial production in September was largely driven by the utilities sector, with output there increasing 3.5 percent on the year after a previous increase of just 0.2 percent. Growth in mining output also improved, up 1.7 percent on the year after advancing 1.3 percent previously, offset by a decline in year-over-year growth in manufacturing output from 5.4 percent to 4.4 percent. Output rose 0.36 percent on the month after increasing 0.50 percent previously.

In a statement accompanying today's activity data, officials described China's economy as having"sustained the momentum of recovery and improvement" with both demand and production increasing. The statement provided little guidance, however, about whether officials consider that further policy support will be required, merely noting that policy is continuing to be implemented"in a precise and robust way" to expand domestic demand and boost confidence.

GDP and monthly activity data published today were stronger than expected. The China RPI and RPI-P rose from minus 41 to plus 16 and from minus 30 to plus 50 respectively, indicating that recent Chinese data in sum are now coming in above consensus forecasts.

Year-over-year growth in industrial production is expected to slow slightly to 4.3 percent in September versus growth of 4.5 percent in August which was higher than expectations for 3.9 percent.

Industrial production measures the change in the total inflation adjusted value of output produced by manufacturers, mines and utilities. Data are compared with the same month a year earlier.

Chinese data can have a broad impact on the currency markets due to China's dominant influence on the global economy and investor sentiment. It's a leading indicator of economic health. Production is the dominant driver of the economy and reacts quickly to ups and downs in the business cycle. No data are published in February for January.

The industrial growth rate is used to reflect a certain period of increase or decrease in volume of industrial production indicators. The indicator can be used to estimate the short term trend of the industrial economy, to judge the extent of the economic boom and also to be an important reference and basis for the formulation and adjustment of economic policies.