China’s November retail sales miss expectations as economic woes deepen

China’s retail sales rose by 3% in November from a year ago, according to National Bureau of Statistics data released Monday, missing the forecast of 4.6% in a Reuters poll.

That marked a sharp slowdown from 4.8% growth in the previous month. Retail sales in October had recorded the quickest growth since February, helped by the annual Singles’ Day shopping festival that kicked off more than a week earlier than the event in 2023.

November industrial production rose by 5.4% from a year ago, above the expectations of 5.3% growth among economists polled by Reuters, which also compares with a climb of 5.3% in the prior month.

The world’s second-largest economy has been contending with pressure from multiple fronts this year. Consumer and business confidence has been hit by a prolonged property downturn, local government debt risks and high unemployment.

Last week, at high-level economic policy meetings, Chinese leadership signaled heightened urgency to shore up the ailing economy, while shifting the country’s policy focus to boosting consumption as Beijing prepares for a potential escalation in trade tensions with the U.S.

The top officials vowed to implement “proactive fiscal tools” and “moderately loose” monetary policies next year, and to “vigorously” lift domestic consumption and stimulate demand “on all fronts,” according to the state-run Xinhua News Agency.

That marked the first time that Beijing acknowledged its monetary policy should be loose since the depths of the global financial crisis in 2008.

Since late September, Beijing has ramped up stimulus announcements in a bid to prop up the faltering economy, including several interest rate cuts and loosened property purchase rules. On the fiscal front, the finance ministry unveiled a five-year 10 trillion yuan ($1.4 trillion) program in November to tackle local government debt problems.

Still, the latest economic data out of China have underscored persisting deflationary pressures in the flagging economy.

Consumer inflation fell to a five-month low in November, with retail prices rising a muted 0.2% from a year ago. China’s producer price index extended the downward trend, falling for the 26th straight month.

The country’s imports declined 3.9% amid sluggish consumer demand, marking the sharpest fall since September 2023, while exports rose by smaller-than-expected 6.7%.

Beyond a trade-in program to incentivize car and home appliance sales, Beijing’s stimulus measures that have been announced so far have not targeted consumption directly.

While the economic planning meetings last week provided broad strokes of policy focus and direction for next year, more specifics and details will only be unveiled at the annual legislative sessions in March.

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