China’s economic landscape shows signs of resilience as retail sales and industrial output grew in the month of October.
The National Bureau of Statistics reported a 7.6% YoY increase in retail sales, surpassing expectations.
This boost is attributed, in part, to the Golden Week holiday period, during which increased travel and shopping activities occurred.
Also, industrial production rose by 4.6%, slightly exceeding projections, signaling a positive trend in the manufacturing sector.
These figures provide a sense of momentum for China’s economy as it navigates challenges, especially in the real estate sector.
While retail sales and industrial output reflect encouraging growth, the property market continues to face challenges.
Property development investment contracted, impacting fixed-asset investment growth negatively.
The contraction has been persistent throughout the first ten months of the year.
Experts emphasize the importance of considering underlying factors, with some cautioning that consumer sentiment may still be uncertain.
Retail sales, while showing growth, maintained a similar pace to September on a month-on-month basis.
Analysts point out that domestic demand could be influenced by factors such as weakened consumer sentiment and the negative wealth effect from the property market.
The government’s ongoing efforts to support the economy include stimulus measures, such as a mid-year budget revision and the approval of sovereign bonds for infrastructure investment.
Despite positive indicators, policymakers acknowledge the need for sustained support to address challenges in housing demand and overall sentiment.
Economists anticipate continued policy support in the coming year, with fiscal policy expected to become more expansionary.
Attention is turning to the real momentum and longer-term perspectives, considering persistent challenges like the property crisis, an aging population, and low business growth.
The data confirms China’s mild economic rebound, positioning it to potentially exceed the official growth target of around 5% for 2023.