Shoppers walk past a Huawei Technologies Co. store on Nanjing East Road in Shanghai, China, on Wednesday, October 2, 2024.
Qilai Shen | Bloomberg | Getty Images
China’s retail sales disappointed in November as property market sentiment continued to weaken, another sign that Beijing’s efforts to stimulate the economy have failed to revive sluggish demand.
According to this, retail sales rose 3% in November compared to the previous year National Statistics Office Data released on Monday missed a Reuters poll forecast of 4.6%.
That marked a sharp slowdown from the previous month’s 4.8% growth. Retail sales were at their fastest pace in October Growth since Februarysupported by the annual shopping festival “Singles’ Day”, which began more than a week before as the event in 2023.
The collapse in real estate investment in the period January to November worsened, shrunk by 10.4% compared to the previous yearafter reporting a 10.3% decline in the January-October period.
The world’s second-largest economy has struggled this year under pressure from multiple fronts. Consumer and business confidence was hit by a prolonged housing downturn, local government debt risks and high unemployment.
“The stimulus effect was short-lived,” My Bui, an economist at investment management firm AMP, said in an email. While the “recent weak but rising momentum in China’s economic data will result in real GDP growth of 5% this year,” weak consumer sentiment due to falling property prices is unlikely to reverse, Bui added.
Industrial production in November increased by 5.4% compared to the previous yearabove expectations for 5.3% growth from economists polled by Reuters, accelerating from a 5.3% rise the previous month.
Fixed capital expenditure, reported on an annual basis, rose 3.3% this year through November on an annual basis and thus missed the forecast of 3.4%. In the period from January to October the value rose by 3.4%.
“Signs of improvement in the economy increased in November thanks to stimulus measures,” the National Statistics Office said in a statement on Mondayadding that “domestic demand remains insufficient and companies are facing operational difficulties.”
Despite the overall decline in consumption, the used goods trade-in program helped sales of home appliances and audiovisual equipment, furniture and cars increase in November 22.2%, 10.5% and 6.6%respectively.
The The urban unemployment rate was 5% in November among people over 16 years of age, unchanged compared to the October value.
A few days after publishing the general unemployment rate, Chinese authorities usually publish a separate unemployment rate for 16- to 24-year-olds, which excludes students. The youth unemployment rate remained high, standing at 17.1% in October and 17.6% in September. In August it reached a record high of 18.8%.
Stuttering recovery
Last week, at high-level economic policy meetingsChinese leaders signaled increased urgency to shore up the battered economy while shifting the country’s policy focus to boosting consumption as Beijing prepares for a possible escalation in trade tensions with the United States
Top officials pledged to introduce “proactive fiscal tools” and “moderately loose” monetary policy next year, as well as “vigorously” boosting domestic consumption and boosting demand “on all fronts,” the newspaper said Xinhua state news agency.
This was the first time since Beijing admitted that its monetary policy should be loose Low point of the global financial crisis in 2008.
Since late September, Beijing has stepped up its stimulus announcements to shore up the faltering economy, including multiple interest rate cuts and relaxed rules on property purchases. On the tax front, the Ministry of Finance unveiled a five-year, 10 trillion yuan deal ($1.4 trillion) program in November to address local government debt problemsS.
Nevertheless, recent economic data from China has underscored ongoing deflationary pressures in the weakening economy.
Consumer inflation fell to a five-month low in November, with retail prices rising a modest 0.2% year-on-year. China’s producer price index continued its downward trend, falling for the 26th consecutive month.
That of the country Imports fell by 3.9% That was the sharpest decline since September 2023 amid sluggish consumer demand, while exports rose a less-than-expected 6.7%.
Beyond a trade-in program to incentivize sales of cars and home appliances, Beijing’s stimulus measures announced so far do not directly target consumption.
During the economic planning meetings last week provided comprehensive policy priorities and direction for next year, further details and specifics will not be announced until the annual legislative session in March.
