Now this is a tad strange. Data came in from China this morning on its latest growth and inflation. Given that the country’s central bank upped rates early in the week, you would have expected some impressive figures, suggesting a danger that the economy is overheating. In reality, the complete opposite was the case. So what’s going on?

Chinese year-on-year growth slowed to 9.6 per cent in the third quarter, from 10.3 per cent three months earlier. There was no real surprise there, forecasters had expected growth of around that level. But when the People’s Bank of China upped the one-year deposit rate by 0.25 per cent to 2.5 per cent, and the lending rate from to 5.31 to 5.56 per cent, earlier this week, forecasters scribbled out their predictions and assumed they had grossly underestimated the level of China’s growth.

As for inflation; well, it rose, but only just, going from 3.5 to 3.6 per cent.

For an economy that is growing as fast as China’s, an inflation rate of 3.6 per cent (remember, UK inflation is 3.1 per cent measured by the CPI measure, but much higher if measured using RPI), is really surprisingly modest.

Of course, China does appear to be suffering from a bubble in property prices, and maybe even an investment bubble. So, in trying to slowly deflate unsustainable booms, the move may make some sense.

But in reality, for the Chinese consumer, interest rates have a different meaning. In the UK, high interest rates are bad, because we use credit to feed our spending habits. The Chinese, by contrast, are a nation of savers. Rising interest rates mean they are better off, and maybe mitigates against their need to save more. (See: China ups rates and maybe savings will fall as a result ). The Chinese government wants to see more consumption, and less investment.

There were two possible explanations for the hike in rates. One explanation was that the government knew something we didn’t and that inflation was set to surge. Well, we now know that explanation is wrong. The other was that the rate hike was a part of the process of trying to encourage more Chinese consumption.

The data out last night also revealed that while industrial output growth slowed from 13.9 per cent to 13.3 per cent, retail spending leapt by 18.8 per cent.

It seems that the gradual move away from investment led growth in China, and which had become unsustainable, to consumer led growth which has been far too slow, is happening. And that has to be celebrated.