China November Retail Sales Up 3%...Below Expectations

Industrial Production Up 5.4% Year-on-Year

China's retail sales in November increased by 3.0% year-on-year to 4.3763 trillion yuan, according to the National Bureau of Statistics of China announced on the 16th.

This figure is lower than the previous month (4.8%) and falls significantly short of the forecasts by Reuters and Bloomberg, which were 4.6% and 5.0%, respectively. It is the smallest growth rate in the past three months.

Shanghai, China. Reuters Yonhap News

Although November includes China's largest shopping season, Guanggunjie, consumer sentiment appears to remain sluggish.

Industrial production in November rose by 5.4% year-on-year, similar to the previous month (5.3%) and Reuters' forecast (5.3%).

Michelle Lam, Societe Generale's Greater China economist, pointed out, "The data indicates that domestic demand recovery remains weak. On the other hand, the stabilization of industrial production is likely due to some orders being placed ahead of the US tariff imposition, which is unlikely to be sustainable."

Fixed asset investment (excluding rural areas), which reflects capital investment in factories, roads, power grids, and real estate, reached 46.5839 trillion yuan from January to November, up 3.3% year-on-year. This slightly underperformed the January-October figure (3.4%) and Reuters' forecast (3.4%).

Real estate investment from January to November fell by 10.4% year-on-year, indicating a continued downturn in the real estate market. However, new home prices in 70 major cities in November declined by 0.2% month-on-month, marking the smallest drop in 17 months.

The urban unemployment rate remained stable at 5.0%, down 0.1 percentage points year-on-year.

Julian Evans-Pritchard, head of China economics at Capital Economics, said, "Despite recent stimulus measures, the Chinese economy appears to have slowed last month. However, we doubt whether the stimulus can bring more than a short-term improvement. Especially if President-elect Donald Trump begins to implement tariffs, the current strong export demand is unlikely to continue."

The WSJ reported, "Economists say China is likely to meet its official growth target of about 5% this year, but next year will be much more challenging. Many economists expect China's growth to slow next year, particularly if President-elect Donald Trump follows through on threats to impose massive new tariffs on Chinese imports."

The National Bureau of Statistics of China stated, "In November, the effects of existing and increased policies continued to appear, the national economy stabilized and developed, and positive changes expanded," but also noted, "The external environment has become more complex, domestic demand is insufficient, and some enterprises face difficulties in production and operation, so the foundation for sustained economic recovery must be strengthened."