Chinese retail sales: Slowest growth recorded since August 2024; external instability, domestic pressures & more concerns weigh – The Times of India
China’s consumer spending lost further momentum in October, with official figures showing the weakest pace of retail growth in more than a year.The numbers, released on Friday highlight the difficulty authorities are facing as they try to lift confidence among households still reluctant to spend.According to the National Bureau of Statistics (NBS), retail sales were up 2.9% year-on-year last month, easing from the 3% rise recorded in September. The performance marked the slowest expansion since August of the previous year and extended a five-month pattern of moderating growth from the 6.4% high reached in May.At a briefing in Beijing, NBS chief economist Fu Linghui acknowledged the strain on the broader economy. “External instability and uncertainty factors remain numerous, domestic structural adjustment pressures are significant, and the stable operation of the economy faces many challenges,” he told AFP.China has struggled with muted domestic demand since the end of Covid restrictions, while long-running stress in the property market continues to weigh on households. Economists have argued that a shift towards consumption-driven growth will be essential, as infrastructure investment and exports, once the main engines, offer less support. Even so, officials are pressing ahead with a five percent growth target for 2025, which analysts still consider achievable.October’s spending slowdown coincided with efforts by Beijing and Washington to ease their trade dispute. Presidents Donald Trump and Xi Jinping reached a one-year truce in October aimed at reducing the damage from the long-running trade war. China’s exports have held up through most of the year despite U.S. tariffs, helped by stronger shipments to markets such as Southeast Asia. However, reviving activity at home has been considerably harder.Last month’s Communist Party meeting on economic planning placed emphasis on boosting demand, with leaders calling for the country to “vigorously boost consumption”. A report issued this week by Moody’s Ratings warned that China’s “domestic demand may be slow to revive”, adding that new priorities include “accelerating innovation in strategic technologies and reinforcing domestic demand through structural improvements in income distribution and social safety nets”.Factory output also missed expectations. Industrial production rose 4.9% in October compared with a year earlier, below Bloomberg’s 5.5% forecast and the slowest increase since August of last year. “A key drag came from weaker external demand — export values and industrial sales for export both weakened significantly,” said Zichun Huang of Capital Economics in a note on the latest data. She further told AFP that “the economy [is expected] to remain weak over the coming quarter” and said the trade truce with Washington “is unlikely to provide much relief”.The country’s housing market continued to deteriorate. New home prices fell year-on-year in 61 of the 70 major cities tracked by the NBS in October, reflecting the ongoing impact of a debt crisis that has gripped the sector since 2020. “The housing sector still clouds the overall outlook,” wrote Sheana Yue, Senior Economist at Oxford Economics. Investment figures also pointed to softening conditions. Fixed-asset investment declined 1.7% in the January–October period from a year earlier, following a 0.5% drop in September when the measure first turned negative.
