China’s October retail and industrial data miss expectations

China’s October retail and industrial data miss expectations

Covid cases have soared in China’s capital city of Beijing, where many communities have been recently locked down or under tighter health monitoring as the country maintains its zero-Covid policy.
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BEIJING — Three indicators on China’s economy in October missed expectations and marked a slowdown from September, according to data released by China’s National Bureau of Statistics on Tuesday.

Retail sales fell by 0.5% in October from a year ago, and industrial production grew by 5%, the data showed.

Analysts polled by Reuters expected retail sales would slow to 1% year-on-year growth in October, and that industrial production would also slow to 5.2% growth.

Fixed asset investment for the first 10 months of the year grew by 5.8%, a touch below expectations for maintaining the same pace as September, with a 5.9% increase year-on-year, according to the Reuters poll.

Data released ahead of Tuesday’s announcement revealed a negative turn in trade and domestic demand last month.

Exports dropped in October for the first since May 2020, while the producer price index fell for the first time in nearly two years. The core consumer price index, excluding food and energy, showed no change from September with muted 0.6% year-on-year growth in October.

Credit data disappointed, mainly due to the slump in the property market, pointed out Larry Hu, chief China economist at Macquarie. He noted that household loans for the first 10 months of the year are less than half what they were a year ago.

Over the last few days, authorities have announced measures to support the struggling property market, according to financial media and official notices. It’s uncertain whether the changes are enough, “but it’s clear that policymakers now have the courage to take more decisive actions,” Hu said in a report.

October was marked by the Chinese Communist Party’s twice-a-decade 20th National Congress, at which Chinese President Xi Jinping consolidated his power for an unprecedented third term.

Ongoing travel restrictions to control Covid outbreaks weighed on tourism during a week-long public holiday last month. Tourism revenue for the holiday was just 44% of what it was in 2019, according to official figures.

China on Friday reduced Covid-related quarantine times, among other changes. In the last few days, some regions have halted broad virus testing requirements, according to local media.

But infections have meanwhile soared, especially in Beijing and the southern city of Guangzhou. Virus testing requirements to enter some public venues in the capital city tightened in the last few days, while many locals in the business district found it harder on Monday to get a test.

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