financetom
Economy
financetom
/
Economy
/
China's factory output up, but consumption still a drag
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
China's factory output up, but consumption still a drag
Dec 15, 2024 7:22 PM

BEIJING (Reuters) -China's industrial output growth quickened slightly in November, while retail sales disappointed, keeping pressure on Beijing to ramp up stimulus for a fragile economy as it braces for more U.S. trade tariffs under a second Trump administration.

The mixed set of data underlines the challenges facing Chinese leaders heading into 2025 when trade relations with the United States could worsen at a time when domestic consumption also remains weak.

China's industrial output grew 5.4% in November year-on-year, up from the 5.3% pace seen in October, data from the National Bureau of Statistics (NBS) showed on Monday, beating expectations for a 5.3% increase in a Reuters poll.

However, retail sales, a gauge of consumption, grew just 3.3% last month, much slower than a 4.8% rise seen in October. Analysts had predicted a 4.6% expansion.

The weaker retail figures come despite a boost from major online shopping promotions and government-subsidised trade-in programs that have boosted sales in sectors including automobiles.

Fixed asset investment also increased at a slower 3.3% pace in January-November from the same period a year earlier, compared with an expected 3.4% rise. It grew 3.4% in the January to October period.

NBS spokesperson Fu Linghui told a media briefing that the trend of recovery in consumption has not changed and that officials would implement more policies to boost domestic demand.

At last week's Central Economic Work Conference (CEWC), a closely-watched agenda-setting meeting, China's top leaders pledged to raise the budget deficit, issue more debt, and make boosting consumption a top priority.

The remarks echoed commitments made by a meeting of top Communist Party officials, the Politburo, earlier this month, which endorsed an "appropriately loose" monetary policy in the first easing of its stance in 14 years.

Policymakers continue to grapple with a years-long property crisis that is dragging on consumer confidence and the broader economy, with some 70% of household savings parked in real estate.

There was some encouraging signs on China's new home prices, which fell at the slowest pace in 17 months in November.

Officials in recent months have doubled down on efforts to encourage homebuying, including cutting mortgage rates and minimum down-payment ratios, as well as tax incentives to lower the cost of housing transactions.

However, most analysts say a sure-footed recovery in the real estate sector appears to be some way off.

Reuters has reported that policy advisers have recommended that Beijing maintain a growth target of around 5.0% for next year, with one government economist saying that China can offset the impact of expected U.S. tariffs on its exports by further boosting domestic demand.

Trump, who is set to start his second term as the U.S. president in January, has threatened tariffs in excess of 60% on imports of Chinese goods.

Reuters also reported last week that China was considering allowing the yuan to weaken in response to punitive trade measures, but a readout from state media Xinhua after the CEWC reiterated a commitment to maintain the yuan's basic stability.

A recent Reuters poll predicted China will grow 4.5% next year, with new U.S. tariffs potentially shaving up to 1 parentage point off growth.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
BOJ chief says it is 'still taking time' to sustainably hit inflation goal
BOJ chief says it is 'still taking time' to sustainably hit inflation goal
Oct 28, 2024
WASHINGTON (Reuters) - Bank of Japan Governor Kazuo Ueda said on Wednesday that underlying inflation has been rising slowly, but it was still taking time for the country to achieve 2% inflation in a sustainable manner. Ueda also told a panel at the International Monetary Fund that it was very hard to pin down the appropriate size of interest rate...
US labor board wrongly ordered Tesla's Musk to delete anti-union tweet, court rules
US labor board wrongly ordered Tesla's Musk to delete anti-union tweet, court rules
Oct 28, 2024
(Reuters) - A divided U.S. appeals court on Friday ruled that the National Labor Relations Board went too far by ordering Tesla CEO Elon Musk to delete a 2018 tweet stating employees of the electric vehicle maker would lose stock options if they unionized. The New Orleans-based 5th U.S. Circuit Court of Appeals on a 9-8 vote threw out an...
Kansas City Fed Services Index Indicates Return to Expansion in October
Kansas City Fed Services Index Indicates Return to Expansion in October
Oct 27, 2024
11:07 AM EDT, 10/25/2024 (MT Newswires) -- The Kansas City Federal Reserve's monthly composite services index rebounded to a reading of 5 in October after falling to minus 2 in September, suggesting a return to expansion. A reading above zero indicates growth. The index is in line with the Philadelphia Fed, Richmond Fed and the S&P Global flash indexes but...
US Dollar Falls Early Friday Ahead of Durable Goods, Michigan, Kansas City Fed Services Data
US Dollar Falls Early Friday Ahead of Durable Goods, Michigan, Kansas City Fed Services Data
Oct 27, 2024
07:52 AM EDT, 10/25/2024 (MT Newswires) -- The US dollar fell against its major trading partners early Friday, except for a small gain versus the euro, ahead of the release of durable goods orders data for September at 8:30 am ET. The final estimate of the University of Michigan's consumer sentiment index for October is due to be released at...
Copyright 2023-2026 - www.financetom.com All Rights Reserved