Economic Overview of China in October 2023

Industrial Production and Retail Sales
Chinese industrial production grew at a slower-than-expected pace in October amid weak local demand. According to government data released on Friday, industrial production rose 5.3% year-on-year, which was below expectations of 5.5% and a decline from 5.4% in the previous month.

The sluggish industrial production was attributed to continued lethargy in manufacturing activity, influenced by persistent headwinds from weak local demand and spending. This trend was echoed in the fixed asset investment figures, which grew by 3.4% year-on-year, falling short of expectations of 3.5%.

Conversely, retail sales experienced a boost, increasing by 4.8% year-on-year, surpassing expectations of 3.8% and rising from 3.2% in the prior month. This uptick was largely fueled by the Golden Week holiday at the start of the month and showed improvements in private spending, prompted by Beijing's recent aggressive stimulus measures.

China's unemployment rate also slightly improved to 5%, down from 5.1%. However, the government has yet to announce targeted fiscal policies aimed at bolstering private consumption and the property market. Earlier data indicated a 5.9% decline in house prices in October, highlighting ongoing challenges in that sector.

Additionally, China is confronted with renewed economic pressures due to an escalating trade conflict with the West, particularly following president-elect Donald Trump's commitment to impose steep trade tariffs.