China’s retail sales for November grew at a slower-than-expected pace, exacerbating concerns over the country’s economic recovery.
Retail sales rose by just 3% year-on-year, falling short of the anticipated 4.6% increase and slowing from October’s 4.8% growth. This disappointing figure has added to mounting pressure on policymakers, especially after President Xi Jinping recently emphasized boosting consumption as a key focus for China’s economic revitalization.
The weaker-than-expected retail growth comes despite an overall slight improvement in industrial production, which rose 5.4% in November, surpassing the forecast of 5.3%. However, retail sales, as a critical indicator of consumer demand, remain a concern for China’s economic outlook.
The Chinese leadership’s emphasis on consumption, made clear at the Central Economic Work Conference, underscores the urgency of addressing weak domestic demand. The government is exploring several measures to stimulate consumer spending, including subsidies for household goods and vehicles. However, economists caution that such efforts may only offer temporary relief, as consumer confidence remains fragile, partly due to the ongoing property market crisis and the slow recovery of household consumption post-COVID.
Although there are signs of stabilization in the property market, with housing price declines slowing in November, the overall outlook for domestic consumption remains subdued. Notably, categories like cosmetics saw a significant sales decline of 26%, further highlighting the challenges in stimulating demand for discretionary goods.
To address these issues, China has shifted its monetary policy to a more accommodative stance and is expected to introduce additional fiscal measures in the coming months. However, analysts suggest that the effectiveness of such measures may be limited, especially given the broader global economic uncertainties and potential trade tensions under a second Trump administration.
Bloomberg, CNN, and the Financial Times contributed to this report.
