China’s industrial output grew slightly faster than expected in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more US trade tariffs under a second Trump administration.
The mixed data underline how challenging it will be for China’s leaders to mount a durable economic recovery heading into 2025, when trade relations with the country’s biggest export market could worsen while domestic consumption stays weak.
US President-elect Donald Trump’s vow to impose tariffs exceeding 60% on Chinese goods could push Beijing to accelerate plans to rebalance its $19 trillion economy, analysts said. This comes after over two decades of deliberation on transitioning from a growth model focused on fixed-asset investment and exports to a consumption-driven one.
China’s industrial output in November grew 5.4% from a year earlier, beating expectations for a 5.3% increase. However, retail sales, a gauge of consumption, grew at its weakest pace in three months at 3.0%, much slower than a 4.8% rise seen in October.
Analysts warn that China’s economic policies have been consistently focused on promoting manufacturers over consumers, despite signs of lasting weakness. This could lead to production capacity strengthening and motivating Chinese companies to seek overseas markets.
Policymakers have begun voicing their plans for 2025, with a focus on boosting consumption and stabilizing the property sector, which has been dragging on consumer confidence. Analysts predict China’s GDP growth forecast will be raised, but warn that stimulus efforts may only deliver short-lived improvements due to the current strength of export demand.
Source: https://www.reuters.com/markets/asia/chinas-factory-output-quickens-nov-consumption-still-drag-2024-12-16