Industrial output grew 4.9 per cent year-on-year in October, National Bureau of Statistics (NBS) data showed, the weakest annual pace since August 2024, compared with a 6.5 per cent rise in September. It missed a 5.5 per cent increase forecast in a Reuters poll.
Retail sales, a gauge of consumption, expanded 2.9 per cent last month, also their worst pace since August last year, and cooled from a 3.0 per cent rise in September. They compared with a forecast gain of 2.8 per cent.
NEW POLICY DIRECTION NEEDED
Policymakers acknowledge the need for change to address historical supply-demand imbalances, lift household consumption and tackle towering local government debt that keeps provinces – many with economies the size of nations – from being self-reliant.
All the same, they also recognise structural reform will be painful, and is fraught with political risk at a time when Trump’s trade war has ramped up pressure on the economy.
“The external environment remains fraught with instability and uncertainty, while domestic structural adjustments face considerable pressure,” Fu Linghui, a spokesperson at the NBS told a press conference following the data release.
China’s exports unexpectedly crumbled in October, data showed last week, as producers struggle to turn a profit in other markets after months of front-loading to beat Trump’s tariff threats.
Surprisingly, China’s car sales also snapped an eight-month growth streak, despite expectations purchases would accelerate before the phase-out of various tax breaks and government subsidies. That’s worrying as the fourth quarter is typically the strongest for auto sales, and the slump came even with an extra day due to a national holiday last month compared with 2024.
The October headline retail figure was bumped up by China’s Singles’ Day shopping festival, which wrapped up on Wednesday after more than a month of promotions on the country’s biggest e-commerce platforms. However, consumer sentiment remained muted compared with previous years, suggesting that even steep price drops are failing to entice shoppers.
“The loss of momentum in the second half of the year remains a little disappointing given the stated importance of domestic demand,” said Lynn Song, chief economist for Greater China at ING.
Song attributed the slowdown to the phase-out of the government’s trade-in subsidy scheme, adding that “a new policy direction will likely be needed to support consumption next year.”
https://www.channelnewsasia.com/east-asia/china-economy-factory-output-retail-sales-growth-worst-over-year-5466961
