C
hina reported strong retail sales and industrial production growth in October, signaling that its recent stimulus push is having a positive impact on certain sectors of its economy. Retail sales rose 4.8% year-on-year, exceeding forecasts and marking an improvement from September's 3.2% growth. Industrial production also increased by 5.3%, although this fell short of expectations.
However, real estate investment continued to decline, with a 10.3% drop in the January-October period, a steeper fall than the previous month. This marks the sharpest decline since August 2021, according to official data. National Bureau of Statistics spokesperson Fu Linghui reiterated China's pledge to halt the real estate decline and described the sector as showing "active improvement."
Looking ahead, economists predict that real estate investment will stabilize and recover slightly over the next 12-18 months. Sales of new properties narrowed their decline in October compared to September, with a year-to-date drop of 20.9% versus 22.7% previously.
Infrastructure and manufacturing investments also picked up in the year-to-date period as of October, while the unemployment rate in cities fell to 5%. The statistics bureau attributed these improvements to the acceleration of existing policies and new incremental measures introduced in October.
Despite these positive signs, Chinese authorities warned of persistent domestic and external headwinds. To achieve its annual growth target, they called for "doubling" policy implementation efforts. Recent stimulus announcements have fueled a stock rally, with interest rate cuts and real estate support extended by the central bank. A five-year 10 trillion yuan program to address local government debt problems was also announced last week.
Manufacturing surveys indicated a pickup in activity last month, while exports surged at their fastest pace in over a year. However, imports fell due to soft domestic demand. The core consumer price index rose modestly by 0.2% in October from a year ago.
