This photo shows a Shanghai development site under construction on November 4, 2024.
Photo | Future Publishing | Getty Images
BEIJING – China on Friday reported strong growth in retail sales and decline in real estate investment in October, suggesting the country’s latest stimulus measures are working to shore up certain sectors of the already sluggish economy. did.
Retail sales rose 4.8% year-on-year, the Office for National Statistics said on Friday. Growth was faster than the 3.8% forecast in a Reuters poll and accelerated from 3.2% in September.
Industrial production increased by 5.3% from the previous year, falling short of the expected 5.6% growth. On the other hand, fixed asset investment reported on a year-to-date basis increased by 3.4% from the previous year, slower than the expected 3.5% increase.
Due to the worsening real estate recession in the country, real estate investment in the January-October period fell 10.3% compared to the same period last year, much lower than the 10.1% decline in the January-September period.
This was the steepest decline since the start of the year to August 2021, when a steep 10.9% drop was reported, according to official data accessed via Wind Information.
At a press conference on Friday, National Bureau of Statistics spokesperson Fu Linghui reiterated China’s pledge in late September to stem the decline in real estate, saying the sector is making “active improvements,” according to CNBC’s Chinese translation. said that it can be seen.
Looking ahead, real estate investment is likely to stabilize and recover slightly over the next 12 to 18 months, said Bruce Pang, JLL’s chief economist and head of Greater China research.
He noted that new real estate sales have declined at a slower rate on a year-to-date basis compared to October and September. Sales prices for new properties fell 20.9% in the first 10 months of the year, exceeding the 22.7% decline seen in September.
On the other hand, investment in infrastructure and manufacturing increased slightly from the beginning of the year in October compared to September.
The urban unemployment rate fell to 5% from 5.1% in September. Unemployment rates for youth aged 16 to 24 and out of school are typically released several days after the broader unemployment rate. This figure fell from a record high of 18.8% in August to 17.6% in September.
The Statistics Bureau attributed the improvement in key economic indicators to the “acceleration” of existing policies and the “introduction of a large number of additional policies in October.”
But he warned of persistent headwinds at home and abroad, while calling for the country to “redouble” policy implementation efforts to meet annual growth targets.
Chinese authorities have stepped up announcements of economic stimulus measures since late September, accelerating the rise in stock prices. The central bank cut interest rates and extended existing real estate support.
On the fiscal front, the Ministry of Finance last week announced a five-year 10 trillion yuan ($1.4 trillion) program to address local government debt problems, with further fiscal support likely to come next year. suggested.
A manufacturing survey showed a rebound in production activity last month, with exports surging at the fastest pace in more than a year.
However, imports decreased as domestic demand remained weak. The core consumer price index, which excludes more volatile food and energy prices, rose 0.2% in October from a year earlier, slightly better than the 0.1% rise in September.
Other than trade-in programs aimed at boosting sales of cars and home appliances, the Chinese government’s economic stimulus plans do not directly target consumers.
China’s Golden Week holiday in early October confirmed a trend toward more cautious consumer spending, but several consultants said sales during the recently concluded Singles’ Day shopping festival exceeded lower expectations.
Gross domestic product increased by 4.8% in the first three quarters of this year. The country has set a growth target of around 5% this year.
