What's going on?

In a sign that China�s economic recovery is solidifying, some surprisingly good Chinese economic data for October was released on Tuesday – and, yes, that matters for the rest of us!

What does this mean?

According to the data, Chinese manufacturing (e.g stuff produced in a factory) accelerated at its fastest pace in two years. The finer details were also positive: companies reported higher expectations for more orders in future months and the performance of small- and medium-sized businesses improved (which suggests the recovery is more widespread than just major, state-backed companies). Also, prices in China are going up, which could be good news for the global economy (see below).

Why should I care?

For you personally: Yes, the prices that Chinese manufacturers are able to charge impact your life.
You might have noticed that in recent years the cost of �services� (e.g. health care premiums) are going up far more quickly than �goods� like cars or kitchen equipment. That�s partly because China built too many factories in the past few decades. The oversupply of factories led to an oversupply of production, which led to falling prices for goods that factories produce (globally). But if China�s factories are starting to charge more, you could see the prices of goods go up (or at least stop going down). That would make it more expensive to kit out your kitchen, but it�s positive for companies that sell goods (and their employees).


The bigger picture: China has become riskier this year.
China�s improving economy is due partly to a huge increase in companies borrowing money (i.e. the higher borrowing has led to higher spending). More debt makes China an inherently riskier place: companies must pay back those loans eventually or there will likely be serious trouble for China�s banks and wider economy. In the months and years to come, it will be important to see if China�s economy is able to grow at a similar rate without such high levels of borrowing.