China's production accelerates but retail sales lag
According to Reuters reports, China's industrial production slightly accelerated in November, while retail sales fell short. Despite extensive online shopping promotions and government-subsidized programs, the lower retail sales figures surfaced.
Industrial production in China grew by 5.4% in November compared to the same period a year earlier, surpassing analysts' expectations of a 5.3% increase.
Consumption falls short of expectations
Despite the rise in production, retail sales in China increased by only 3.3%, which did not meet analysts' predictions of a 4.6% growth. Despite numerous online shopping promotions and government support programs, sales in the automotive sector and other industries did not reach the expected levels.
Investment in fixed assets increased by 3.3% from January to November, which was slightly below the anticipated growth of 3.4%.
Beijing's future plans
During the Central Economic Work Conference, Chinese leaders committed to increasing the budget deficit and raising debt issuance while prioritizing consumer growth. These decisions align with earlier commitments from the Communist Party's Politburo, which advocated for a more flexible monetary policy, reports Reuters.
Government advisors have recommended maintaining economic growth at 5% next year, which would require strong measures in response to the USA's new trade tariffs. President Trump, who will begin his second term in January, announced tariffs exceeding 60% on Chinese goods.
The stability of the yuan in question
China is contemplating weakening the yuan in response to U.S. trade actions, but state media outlet Xinhua confirmed a commitment to maintain currency stability following the CEWC conference. The Chinese GDP is anticipated to grow by 4.5% next year, though new tariffs could reduce this growth by up to 1 percentage point.
