- House Price Index fell 5.7% year-on-year in November after declining by 5.9% in October.
- Fixed asset investment rose 3.3% year-to-date in November, down from 3.4% in October.
- Industrial production increased by 5.4% year-on-year, up from 5.3% in October.
- Retail sales were up 3.0% year-on-year in November, down sharply from 4.8% in October.
- China’s unemployment remained steady at 5.0%.
While industrial production increased, fixed asset investment dipped, suggesting potential front-loading ahead of US tariffs on Chinese goods. However, the marked drop in retail sales was more concerning, reinforcing the need for stimulus measures to drive consumption and domestic demand.
The pullback in retail sales aligned with recent inflation figures, reflecting a pickup in deflationary pressures. Consumer prices declined by 0.6% month-on-month in November after falling 0.3% in October.
China Consumer Sentiment a Beijing Bugbear
Last week, markets showed disappointment toward China’s Central Economic Work Conference (CEWC) measures to bolster the economy. The CEWC announced plans to raise the budget deficit, loosen monetary policy, and issue more debt. Experts, however, remain skeptical about the effectiveness of these policies as consumer sentiment weakens.
The Kobeissi Letter remarked on China’s consumer sentiment, saying:
“Even as hundreds of billions of dollars of stimulus have begun, Chinese consumer sentiment is terrible. Over the last 3 years, consumer confidence in China is down ~ 50 points. Such a drop in consumer assessment of the Chinese economy has almost never been seen before.”
Today’s data could pressure Beijing to implement stimulus targeting domestic consumption, especially as US tariffs loom.
