China’s retail sales grew last month at their slowest pace in nearly three years, official data showed on Monday, December 15, underscoring the difficulty leaders face in reviving consumption in the world’s second-largest economy.
Beijing has in recent years sought to rebuild confidence in the domestic economy, which has been weighed down by a prolonged debt crisis in the country’s vast property sector.
Reversing the downturn has become a key priority for policymakers, who have repeatedly pledged to strengthen weak domestic activity even as exports to the rest of the world continue to expand.
Retail sales, a key indicator of consumer spending, rose by 1.3 per cent year on year in November, the National Bureau of Statistics (NBS) said. This marked the weakest pace since December 2022, when stringent zero-COVID measures were lifted.
The figure also fell well short of a Bloomberg forecast of 2.9 per cent and matched October’s reading. Monday’s data “point to broad-based weakness in domestic activity”, wrote Zichun Huang of Capital Economics in a research note.
“Policy support should help drive a partial recovery in the coming months, but this probably won’t prevent China’s growth from remaining weak across 2026 as a whole,” she said.
Despite the slump in spending, China’s economy has been supported by strong exports, which have remained resilient despite this year’s fierce trade war with the United States.
The surge in shipments has kept factories busy in the manufacturing powerhouse, which has already recorded a historic trade surplus of more than $1 trillion this year.
However, official data released on Monday showed that factory output growth weakened last month, with industrial production rising 4.8 per cent year on year in November, the slowest pace in more than a year.
That figure narrowly missed a Bloomberg forecast of five per cent and was also slightly lower than October’s 4.9 per cent.
“External demand for Chinese goods appears to be picking up… but that was offset by weakness in domestic demand,” Huang wrote.
Further pressure was evident in fixed-asset investment figures, with the NBS reporting that investment through the end of November fell 2.6 per cent compared with the same period in 2024.
Chinese leaders last week held a key economic meeting at which they pledged to boost consumption, stabilise the property market and create more employment opportunities, according to state media.
The annual closed-door discussions allow officials to debate economic strategy for the year ahead, though they do not usually result in immediate policy announcements.
Economists have long urged Beijing to shift towards a growth model powered more by domestic spending rather than traditional drivers such as exports and manufacturing.
The latest official figures suggest consumers remain cautious. Home prices, a major store of household wealth in China, continued to fall, with new residential property prices in 64 of the 70 major cities surveyed by the NBS declining year on year last month.
“The contraction of fixed-asset investment and the drop of property prices in recent months have been transmitted to the consumer sentiment,” wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, in a note reacting to the data.
“I expect fiscal and monetary policies to be loosened somewhat in (the first three months of next year) to stabilise the economic momentum,” he said.
China’s surveyed unemployment rate stood at 5.1 per cent in November, unchanged from the previous month, the official data showed.
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