China’s October Data Signal Uneven Recovery as Spending Holds but Investment Falters
China’s latest economic readout points to a stop-start recovery heading into year-end. Holiday-driven consumer spending lifted retail activity, yet factory output underwhelmed and investment weakened further, keeping pressure on policymakers to sustain targeted stimulus.
Retail sales grew 2.9% year-on-year in October, buoyed by the National Day and Mid-Autumn holidays and a rebound in services consumption. By contrast, industrial output rose 4.9%, missing expectations and slowing from September’s pace. The unemployment rate eased slightly to 5.1%, while firmer prices in services and industrial goods nudged inflation back into positive territory.
Investment remained the weak link. Fixed-asset investment fell 1.7% year-to-date, dragged down by a deepening property-sector slump. Real estate investment dropped 14.7% in the first ten months, with new project starts and developer financing posting steep double-digit declines. The National Bureau of Statistics noted that firms are increasingly cautious amid a challenging external environment and intense domestic competition, though high-tech and emerging manufacturing continue to expand.
Officials emphasized China’s sizable investment potential and pledged to stimulate private capital, stabilize exports in the face of global protectionism, and extend policy support into the final quarter. While acknowledging short-term adjustment as new growth engines replace old ones, authorities argued that stabilization measures are laying the groundwork to meet full-year growth goals.
Key Points – Retail sales rose 2.9% year-on-year in October, supported by holiday spending. – Industrial production increased 4.9%, below forecasts and slower than September. – Fixed-asset investment fell 1.7% year-to-date; real estate investment slid 14.7% in the first ten months. – Unemployment edged down to 5.1%; CPI returned to positive territory. – NBS highlighted resilience in emerging manufacturing and vowed to spur private investment and stabilize exports. – Policymakers are maintaining targeted stimulus to underpin growth through year-end.
