China retail sales slow, industrial growth picks up
China’s industrial output expanded at the fastest pace in over one and a half years in November, but retail sales growth missed expectations, signalling weak domestic demand as well as a patchy recovery. According to the National Bureau of Statistics (NBS), industrial output advanced 6.6 percent year on year last month, faster than the 4.6 percent gain in October. Retail sales rose 10.1 percent in November, accelerating from a 7.6 percent increase in October, although analysts had expected a 12.5 percent leap. Erin Xin, Greater China economist at HSBC, attributed the latest growth to a relatively low base last year as the country was still grappling with Covid restrictions, but said consumption remains a key pillar of the country’s growth. “When you look at areas like services-related consumption, or areas aside from property-related consumption, they were still quite strong, services consumption was running at nearly 20 percent year on year, and that’s starting to show broadening out to durable goods consumption, such as auto sales, and communication equipment,” said Xin. “There has been continued weakness in the property side, but there’s also a sense of urgency from policymakers to offer more support,” Xin added, noting the latest relaxations from Beijing and Shanghai in home purchases restrictions, as property-related consumption, such as decoration and construction materials continued to fall by double-digits year on year. Property investment, a key gauge indicating sentiments in the struggling real estate market, fell 9.4 percent year on year in the first 11 months of the year, which was faster than the 9.3 percent fall seen a month earlier. Fix-asset investment grew 2.9 percent year on year in the first 11 months of 2023, unchanged from the January-October period, but lower than the market expectation of three percent. Property investment, a key gauge indicating sentiments in the struggling real estate market, fell 9.4 percent year on year in the first 11 months of the year, which was faster than the 9.3 percent fall seen a month earlier. The country's urban jobless rate stood at 5 percent last month, the same as in October. NBS spokeswoman Liu Aihua said the authorities will do more to stimulate consumption while expanding investment, as signalled by Chinese leaders in their two-day Central Economic Work Conference which concluded on Tuesday. The key meeting also saw leaders vowing to continue proactive fiscal policies and prudent monetary policies to support the economy.