- In recent weeks, leading policymakers have announced more support for the economy, particularly for struggling local governments.
- The International Monetary Fund last week cited Beijing’s policy announcements as a reason to raise its growth forecast for China to 5.4% for the year. The IMF also increased its growth forecast for 2024 to 4.6%.
CHONGQING, CHINA – NOVEMBER 5, 2023 – High-rise buildings in downtown Chongqing, China, November 5, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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BEIJING – China reported better-than-expected retail sales and industrial data for October on Wednesday, as the property downturn deepened.
Retail sales rose 7.6% last month from a year earlier, beating the 7% growth rate forecast in a Portal poll.
Industrial production rose 4.6% year-on-year in October, faster than the 4.4% rate forecast in the Portal poll.
Fixed investment rose 2.9% year-on-year in the first 10 months of the year, falling short of expectations for a 3.1% increase.
Investment in real estate fell 9.3% in the period, a steeper decline than the 9.1% decline in the first nine months of the year.
The urban unemployment rate was 5%, according to the National Bureau of Statistics. That was unchanged from September. The bureau has suspended reports on youth unemployment rates since the summer.
At retail, sports and other leisure entertainment products posted a 25.7% year-over-year increase in sales in October, the data showed.
The catering industry as well as alcohol and tobacco recorded double-digit increases in sales. Automobile sales increased by 11.4% compared to the previous year.
The first week of October marked the last major holiday of the year in China, the so-called Golden Week. Official data showed that domestic tourism spending recovered close to 2019 levels. However, this was partly due to more people staying in the country as foreign travel had not yet fully returned to pre-pandemic levels.
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In recent weeks, leading policymakers have announced more support for the economy, particularly for struggling local governments. Beijing has also taken steps to stabilize the huge real estate sector, which is expected to become a smaller part of the economy in the long term.
The International Monetary Fund last week cited Beijing’s policy announcements as a reason to raise its growth forecast for China to 5.4% for the year. The IMF also increased its growth forecast for 2024 to 4.6%.
When it comes to real estate, “the pressure remains,” IMF First Deputy Managing Director Gita Gopinath said in an exclusive interview with CNBC.
“The market is still very tense. The market remains weak,” she said. “This won’t be over anytime soon. It will take some time before we get back to a more sustainable size.”
Real estate and related sectors account for about a quarter of China’s gross domestic product.
UBS analysts estimate that share has fallen to around 22% this year. Sales of new homes have fallen while major property developers such as Country Garden have defaulted on their debts.