Chinese Industrial Production and Retail Sales Overview

Investing.com – Chinese industrial production grew more than expected in December, supported by recent stimulus measures from Beijing. Retail sales also outpaced expectations, indicating a rebound in private spending.

Key Highlights

• Industrial Production: Grew 6.2% year-on-year in December, surpassing the median forecast of 5.4%. This is an increase from a 5.4% rise in the previous month. For the year 2024, the annual industrial production growth reached 5.8%, consistent with last year’s performance.

• Manufacturing Sector Recovery: The data suggests that the manufacturing sector is beginning to improve due to supportive measures from the government over the past three months.

• Mixed Economic Signals: Despite the positive industrial production data, fixed asset investment—an important indicator of capital spending by large businesses—increased by 3.2% in December, slightly lower than expectations and down from November’s 3.3%.

• Retail Sales: Chinese retail sales surged 3.7% in December, beating the expectations of 3.5%, and showing significant improvement from November’s 3.0% rise. For the year ending in December, retail sales growth was largely in line with expectations at 3.48%.

• External Risks: Challenges remain, including potential U.S. tariffs that could rise above 60% on Chinese goods, as President-elect Donald Trump is set to take office soon.

• Lack of Support for Private Consumption: Despite the initiatives to support businesses, there has been minimal action to boost private consumption thus far.

• Future Policies: Recent reports suggest plans for a more proactive fiscal approach to stimulate economic growth, with more details expected during the annual parliament sessions in March.

• Unemployment Rate: Data also indicated that China’s unemployment rate edged up to 5.1%, slightly above the 5.0% recorded in the previous month.