China’s retail sales growth has fallen to a three‑year low, rising just 1.3% year‑on‑year in November, according to data from the National Bureau of Statistics (NBS). This is the weakest pace since December 2022, when strict zero‑COVID measures were lifted, and it missed Bloomberg’s forecast of 2.9%, which matched October’s growth rate.
The Chinese government has been working to revive a domestic economy battered by a prolonged debt crisis in the property sector. Reversing the slump has become a top priority for leaders, who have repeatedly pledged to boost weak activity at home despite a boom in exports. Retail sales, a key indicator of consumption, remain a major concern, and the latest figures suggest that the battle to stimulate consumer spending is far from over.
Exports have helped support the economy, staying resilient amid a fierce trade war with the United States. The surge in shipments has kept manufacturing humming, contributing to a historic trade surplus of over $1 trillion this year. However, factory activity slowed last month, with industrial production rising only 4.8% year‑on‑year—the slowest growth in more than a year. Fixed‑asset investment through November fell 2.6% compared with the same period in 2023.
Leaders recently held a key economic meeting, pledging to boost consumption, stabilize the property market, and create more employment opportunities. Economists have long urged Beijing to shift toward a growth model driven more by domestic spending than by exports and manufacturing. Home prices, a major store of wealth for Chinese households, continued to decline, with new residential property prices falling year‑on‑year in 64 of the 70 major cities surveyed by the NBS.
The contraction in fixed‑asset investment and the drop in property prices have dampened consumer sentiment, according to Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. He expects fiscal and monetary policies to be loosened somewhat in the first quarter of next year to stabilize economic momentum. The surveyed unemployment rate stood at 5.1% in November, unchanged from the previous month.
These data underscore the challenges facing China’s leaders as they try to balance the need to boost domestic consumption with the ongoing impacts of the trade war and the property market crisis. As the world’s second‑largest economy, China’s growth trajectory has significant implications for the global economy, and the government’s next steps will be closely watched by investors and policymakers worldwide.
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