Asia looks for more clues on Chinese economy

LOS ANGELES (MarketWatch) � For a second week running, Chinese economic data will take center stage for Asia markets, with investors waiting to see whether the numbers support further monetary easing measures from Beijing.

Click to Play Asia�s week ahead: China's bank reserves In focus

Amid fresh signs of slowing growth in China, authorities in Beijing may have room to lower banks' reserve requirements. Investors in the coming week will get new reports on GDP growth, retail sales and industrial output. MarketWatch's Rex Crum reports. Photo: Getty Images.

This past Thursday, China reported that consumer inflation eased slightly to 4.1% year-on-year in December, down from November�s 4.2%, and well below the above-5% level earlier in the year.

The result, some analysts said, was low enough to provide room for the central bank to support growth with further cuts to banks� reserve requirements, and perhaps even interest-rate cuts. See report on Chinese inflation data.

This coming Tuesday, the markets will get the other half of the picture when China reports its fourth-quarter economic growth, along with other key data, such as retail sales and industrial output.

The median forecast from a Reuters survey has tipped the quarter�s growth rate at 8.7%, which would mark a slowing from 9.1% in the July-September period, and 9.5% in April-June.

Coincidently, that forecast exactly matches a projection for total 2012 growth, made by Chinese government researcher Wang Changsheng last month. See report on Chinese economic growth forecast.

A fourth-quarter number well below the 8.7% level could rattle markets on the one hand, though some interest-rate sensitive stocks could benefit if it seals the case for monetary easing and possible fiscal stimulus.

On the other hand, gross domestic product is by nature a looking data point looking at the past, and for those seeking more recent data, HSBC will release the initial results from its January survey of manufacturers on Friday.

Last month�s HSBC survey showed the manufacturing sector in a mild contraction. See report on December HSBC China manufacturing Purchasing Managers� Index.

The resources sector will also bear watching in the week ahead, as two of the world�s three largest miners � namely, BHP Billiton Ltd. AU:BHP �BHP �and Rio Tinto Ltd. AU:RIO �RIO � present their fourth-quarter production reports.

BHP, which is due to issue its report Wednesday, had a banner third quarter, with its headline iron-ore output jumping 24% from a year earlier, although its copper volumes fell sharply due to a strike at a Chilean mine. See report on BHP Billiton�s Q3 production.

Rio, slated to report a day earlier, also saw strong results in the July-to-September period, with global iron-ore production up 5%. See report on Rio Tinto�s Q3 production.