By Li Hongmei

China's auto sales, retail spending and factory output all improved in August in new signs of an economic recovery.

Retail sales rose 13.4 percent over a year earlier, government data showed Tuesday. Industrial production gained at its fastest rate this year, rising 10.4 percent. An industry group reported growth in auto sales accelerated to 11 percent from July's 10.5 percent.

"The stronger data over the last couple of months have settled nerves about a possible hard landing," said Mark Williams and Qinwei Wang of Capital Economics in a report.

The signs of economic revival will facilitate the Chinese leaders to focus on longer-term structural reforms, which analysts say are needed to keep economic growth strong.

Economic growth declined to a two-decade low of 7.5 percent in the second quarter but trade, factory output, auto sales and other activity has improved since then.

Investment in factories and other fixed assets picked up in August. The National Bureau of Statistics reported it rose 20.3 percent, compared with 20.1 percent for the first eight months of the year.

"The data came in generally better-than-expected, suggesting some further solid pickup in activity momentum," said JP Morgan economist Haibin Zhu.

August export growth accelerated to 7.2 percent from July's 5.1 percent.

Also in August, consumer inflation edged down to 2.6 percent from July's 2.7 percent. Wholesale prices that have declined steadily for more than a year fell less sharply in another sign of growing demand.