- In the past few weeks, top policymakers have announced more support for the economy, especially struggling local governments.
- Last week, the International Monetary Fund cited Beijing’s policy announcements as a reason to raise its forecast for China’s growth for this year to 5.4%. The International Monetary Fund also raised its growth forecast for 2024 to 4.6%.
Chongqing, China – November 5, 2023 – High-rise buildings 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 industrial data for October, while the decline in the real estate sector worsened.
Retail sales grew 7.6% last month compared to a year ago, exceeding growth expectations of 7% in a Reuters poll.
Industrial production rose 4.6% year-on-year in October, faster than the 4.4% pace expected in a Reuters poll.
Investment in fixed assets grew during the first ten months of the year by 2.9% compared to last year, which is contrary to expectations that indicated an increase of 3.1%.
Investment in real estate fell by 9.3% during that period, a sharper decline than the 9.1% decline recorded during the first nine months of the year.
The National Bureau of Statistics said that the unemployment rate in urban areas reached 5%. This has not changed from September. The office has halted youth unemployment rate reports since the summer.
The data showed that within retail sales, sports and other entertainment products saw a 25.7% increase in sales in October compared to last year.
Catering services, as well as alcohol and tobacco, saw sales increase by double digits. Automotive-related sales increased by 11.4% compared to last year.
The first week of October was the last major public holiday of the year in China, known as Golden Week. Official data showed that domestic tourism spending has recovered to almost 2019 levels, but that is partly because more people are staying within the country because outbound trips have not yet fully returned to pre-pandemic levels.
In the past few weeks, top policymakers have announced more support for the economy, especially struggling local governments. Beijing has also taken steps to stabilize its huge real estate sector, which is expected to become a smaller part of the economy in the long term.
Last week, the International Monetary Fund cited Beijing’s policy announcements as a reason to raise its forecast for China’s growth for this year to 5.4%. The International Monetary Fund also raised its growth forecast for 2024 to 4.6%.
When it comes to real estate, “pressures are still there,” Gita Gopinath, first deputy managing director of the International Monetary Fund, told CNBC in an exclusive interview.
“There is still a lot of pressure in the market. There is still weakness in the market,” she said. “This is not going to end quickly. It will take some time to transition back to a more sustainable size.”
Real estate and related sectors account for about a quarter of China’s gross domestic product.
UBS analysts estimate the share has fallen to about 22% this year. New home sales fell, while major real estate developers such as Country Garden defaulted on their debts.
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