China’s industrial output rose more than estimated in July, adding to signs the economy is stabilising following on from yesterday’s unexpectedly strong trade figures .

Factory production increased 9.7 per cent from a year earlier, the National Bureau of Statistics said today in Beijing.

Retail sales advanced 13.2 per cent while fixed-asset investment excluding rural households grew 20.1 per cent in the first seven months of the year.

Consumer prices rose 2.7 per cent in July. The acceleration in factory output may bolster confidence that China will avoid a deeper economic slowdown after larger- than-forecast rebounds in exports and imports and improvement in gauges of manufacturing and service industries.

Stronger production will help Premier Li Keqiang meet this year's 7.5 percent expansion target after growth moderated for two quarters. "The data confirms that China has bottomed out," Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said in a note.

Output is picking up on an anticipated rebound in demand due to government stimulus and recent reductions in inventories, he said.