October retail sales, industrial production, fixed assets, jobs
CHONGQING, CHINA – November 5, 2023 – Tall buildings are seen in downtown Chongqing, China, November 5, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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BEIJING – China on Wednesday reported better-than-expected retail sales and business data for October, while the housing slowdown worsened.
Retail sales grew 7.6% last month from a year ago, above the 7% growth expected by a Reuters poll.
Industrial output rose 4.6% year-on-year in October, faster than the 4.4% pace expected by a Reuters poll.
Fixed asset investment for the first 10 months of the year grew 2.9% from a year ago, missing expectations for a 3.1% increase.
Investment in real estate fell 9.3% in that period, a faster decline than the 9.1% fall reported for the first nine months of the year.
The urban unemployment rate was 5%, the National Bureau of Statistics said. That had not changed since September. The bureau has stopped reporting on the youth unemployment rate since the summer.
Within retail sales, sports and other leisure entertainment products rose 25.7% in October from a year ago, the data showed.
Catering, as well as alcohol and tobacco, saw double-digit sales growth. Auto related sales rose 11.4% from a year ago.
The first week of October marked the last major public holiday of the year in China, known as Golden Week. Official data showed that domestic tourism spending returned to near 2019 levels, but that was partly due to more people staying within the country as overseas travel had not yet returned to pre-pandemic levels .
In recent weeks, key policy makers have announced more support for the economy, especially local governments that are struggling. Beijing has also taken steps to stabilize the large 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 the reason for raising its growth forecast in China for the year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.
When it comes to real estate, “the pressure remains,” IMF Senior Deputy Managing Director Gita Gopinath told CNBC in an exclusive interview.
“There is still a lot of pressure on the market. There is still weakness in the market,” she said. “This is not going to be over quickly. It will take a little more time to move back to a more stable size.”
Real estate and related sectors have accounted for about a quarter of China’s gross domestic product.
UBS analysts estimated that share has declined to around 22% this year. New home sales have fallen, and major property developers such as Country Garden have defaulted on their debt.