Today’s batch of Chinese economic data contains grist for both optimists and pessimists. Bears will focus on a further slide in annual nominal GDP growth to 6.2% in the third quarter – below a 6.5% trough reached during the 2008-09 downturn. Real GDP growth was maintained at a solid 6.9% only via an annual fall in prices, as measured by the GDP deflator.

Bulls, however, can point to improvements in monthly data to argue that stimulus efforts are starting to bear fruit. Six-month growth of industrial output and real retail sales rose further in September – see first chart. Housing floorspace started registered its first year-on-year gain this year. The annual change in auto sales also returned to positive territory. Government spending, meanwhile, rose 27% from September 2014.

These positive signs are consistent with a recovery in real narrow money growth since early 2015. The PBOC released additional monetary data for September today, allowing calculation of the “true M1” measure followed here. Six-month growth of real (i.e. CPI-adjusted) true M1 surged to its highest level since 2010, suggesting a further acceleration in industrial output and other activity measures into early 2016 – first chart.

Recent intervention to support the renminbi, meanwhile, may have been larger than current market estimates. Foreign exchange reserves were earlier reported to have fallen by $180 billion during the third quarter but this figure mixes valuation effects with transactions. The transactions element is separated out in the balance of payments accounts but these have yet to be released for the third quarter. The transactions series, however, correlates closely with the change in financial institutions' “position for forex purchase”, which fell by 1.73 trillion yuan, or $275 billion, last quarter – second chart. The monthly decline in the forex purchase position, moreover, was larger in September than August, casting doubt on the suggestion from the reserves data that intervention slowed last month.