China's manufacturing indicator, industrial production, and the domestic demand indicator, retail sales growth rate, hit a yearly low in Nov. In particular, retail sales were the lowest since the COVID-19 pandemic, and investment-related indicators such as real estate also have yet to shake off the crisis. Experts said that groundbreaking and more long-term new measures are needed.
China's National Bureau of Statistics (NBS) released major economic indicators for Nov. on the 15th in the morning local time. Industrial production rose 4.8% from the same period a year earlier. That was a slowdown from the previous month's 4.9% increase, missed the 5.0% gain expected by the market as compiled by Reuters, and was the smallest rise since Aug. last year.
Value added in the three major industries (year over year) rose 6.3% in mining, 4.6% in manufacturing, and 4.3% in energy.
Of the 41 major industrial institutional sectors, 30 increased from a year earlier. They included automobile manufacturing 11.9%, railway, shipbuilding, aerospace and transport equipment manufacturing 11.9%, computer, communications and electronic equipment manufacturing 9.2%, coal mining and washing 7.5%, general equipment manufacturing 7.5%, chemical raw materials and products manufacturing 6.7%, and petroleum and gas extraction 5.1%. Over the same period, nonmetallic mineral products (-1.8%) and wine, beverage and tea manufacturing (-0.6%) declined.
Retail sales in Nov. rose only 1.3% despite the large shopping festival "Singles' Day." That was a sharp slowdown from the previous month's 2.9% increase and far below the 2.9% gain expected by the market as compiled by Bloomberg. It was the smallest increase since Dec. 2023 (down 1.8%), and China's retail sales growth rate has fallen for six straight months since May.
Bloomberg said the Nov. retail sales growth rate was "the lowest on record excluding the COVID-19 pandemic period," adding, "The consumption slowdown was affected by weak auto sales and by Singles' Day promotions starting earlier than usual, which pulled demand forward into Oct." It added, "Since late last year the Chinese government began paying shopping subsidies, creating a base effect of higher consumption a year earlier. This shows the impact of the subsidy policy turning from a tailwind to a headwind. Next year, the subsidy policy needs to be expanded to new items or new consumption stimulus is needed."
Fixed assets investment fell 2.6% in Jan.–Nov., and the nationwide unemployment rate in Nov. was 5.1%, unchanged from the previous month.
The real estate market, a major factor shaking China's economy, continues to worsen. As major developer Vanke fell into the risk of debt default, real estate development investment in Jan.–Nov. dropped 15.9% from a year earlier. Among this, investment in dwellings fell 15%. Fundraising by Chinese real estate developers fell 11.9%.
According to Reuters, dwelling prices in Nov. fell 2.4% year over year, widening from a 2.2% drop in the previous month. Dwelling prices are expected to continue falling next year as well. Citigroup said in a report that "China's housing market in 2026 is likely to face a harsh reality," and projected that without an improvement in liquidity, China's home sales next year will fall by an additional 11%. John Lam, head of China real estate research at UBS Group, also projected that China's dwelling prices will continue to decline for at least two more years.
According to Bloomberg, Raymond Yeung, chief China economist at Australia and New Zealand Banking Group (ANZ), said, "China's economy is seeing a simultaneous contraction in real estate and a slowdown in retail sales," adding, "This trend conflicts with the government's message emphasizing boosting domestic demand. Authorities will need to take groundbreaking and comprehensive measures in 2026." In this regard, the National Bureau of Statistics said the Chinese government will continue to expand domestic demand and optimize supply based on more proactive macroeconomic policies.