Beijing, China â
Wed, December 15, 2021
China’s retail sales grew more slowly than expected in November as consumers were cautious of rising domestic coronavirus cases, official data showed on Wednesday, but industrial production resumed after cuts eased electricity.
A rebound in the world’s second-largest economy has run out of steam, with indicators muted last month, after the country quickly recovered from coronaviruses, aided by strict border controls and targeted closures.
Economists said a recent nationwide surge, in which viral infections hit 21 provinces and regions, has likely led to more cautious consumer behavior as containment measures take effect, while a collapse of the real estate market is getting worse.
Retail sales grew 3.9% year-over-year (year-on-year), the National Bureau of Statistics (NBS) said, below expectations and significantly slower than October’s 4.9%.
“The international environment has become more complex and severe, and many constraints still weigh on the national economic recovery,” NBS spokesman Fu Linghui told reporters.
Economists Sheana Yue and Mark Williams of Capital Economics said in a research note that the pandemic “remains the main reason preventing a full recovery”, causing “the weakness of the labor market”.
The urban unemployment rate climbed to five percent last month, from 4.9 percent.
Williams had earlier said passenger traffic data indicated consumer cautiousness, while there were other “negative signals” such as slowing sales growth at the annual shopping festival from 1 to November 11 – China’s response to the United States (United States) “Black Friday” consumer frenzy.
But industrial production rose 3.8% year-on-year in November, in line with expectations of a recovery.
This came as disruptions from power shortages abated.
The blackouts in recent months linked to emission reduction targets, soaring coal prices and supply shortages have affected certain industrial productions.
âEven though power shortages have eased recently, high input prices will persist […] and weak domestic demand could be a drag in the longer term, “Moody’s Analytics warned on Monday.
Growth in investment in fixed assets slowed to 5.2% in the first 11 months, with real estate investment up 6% – down from the January-October period – with lower home sales and housing sales. strict funding rules.
âWage arrears in real estate-related sectors, particularly the construction sector, could also weigh on consumption,â said Lu Ting, chief economist for China at Nomura.
China’s real estate industry has been plunged into limbo as big developers like giant Evergrande Group struggle to shake off the crushing burden of debt.