cross-posted from: lemmy.sdf.org/post/47404286

  • Factory output, retail sales grow at weakest pace in over a year
  • Data highlight weak domestic demand, record trade surplus
  • Policymakers face rising calls to reduce export reliance
  • China growth expected to remain weak in 2026

Archived

…

China’s factory output growth slowed to a 15-month low, while retail sales posted their worst performance since the country abruptly ended its draconian “zero-COVID” curbs, highlighting the urgent need for new growth drivers heading into 2026.

With Beijing’s consumer trade-in subsidies fading, a drawn-out property crisis weighing on household spending and industrial investment risking further deflation, officials have leaned on exports to support growth.

…

That strategy now looks increasingly unsustainable as trading partners around the world bristle at China’s $1 trillion trade surplus and look to erect import barriers.

…

Industrial output rose 4.8% year-on-year, National Bureau of Statistics (NBS) data showed on Monday, the weakest pace since August 2024, slowing from 4.9% in October. It missed a 5.0% increase forecast in a Reuters poll.

Retail sales, a gauge of consumption, grew 1.3%, their weakest pace since December 2022, when the world’s second-largest economy ended pandemic restrictions, well below 2.9% in October and forecasts for a 2.8% gain.

…

BEIJING STRUGGLING FOR FRESH IDEAS

The International Monetary Fund last week urged Beijing to speed up structural reform and take action over the property sector, with some 70% of Chinese household wealth tied up in real estate.

Fixing the property pains within the next three years will cost the equivalent of 5% of GDP, the IMF estimates.

More needs to be done to boost household consumer confidence, Fu Linghui, a spokesperson for China’s customs administration, told a news conference after the data release.

…

Fu added that an annual 2.6% decline in fixed asset investment in January-November had largely been driven by a 15.9% drop in property investment over the same period. Developers are struggling to convince investors there are buyers for their apartments, which remain unsold even at discounted prices.

…

Vanke, one of China’s largest real estate developers, plans to convene a second bondholder meeting this week as it battles to avert default, after investors rejected a plan by the state-backed lender to push back repayment by a year.

The property sector once made up a quarter of China’s gross domestic product.

…

At a key economic meeting last week outlining next year’s policy agenda, Chinese leaders promised to maintain a “proactive” fiscal policy to spur consumption and investment, while acknowledging a “prominent” contradiction between strong domestic supply and weak demand.

Yet the dual focus on consumption and investment cements concerns that Beijing is not yet ready to ditch a production-driven economic model in favour of one that leans more on household spending.

World leaders look to be lining up to put the brakes on China’s exports.

…

Chinese producers may struggle to find new domestic buyers if exports dry up.

“November data point to a broad-based weakness in domestic activity, largely due to a pull-back in fiscal spending,” said Zichun Huang, China economist at Capital Economics.

…