Customers are shopping at the new Costco store in Nanjing, Jiangsu Province, China on May 28, 2024. The National Bureau of Statistics reported better-than-expected retail sales and industrial production for September in China. Retail sales grew by 3.2% from a year ago, surpassing analysts’ expectations of 2.5% growth. This growth rate was higher than the previous month’s 2.1% increase. Industrial production also saw a significant expansion of 5.4% in September, exceeding the 4.5% forecasted by analysts.
Fixed asset investment in China grew by 3.4% from January to September. The urban unemployment rate in September was reported at 5.1%, a decrease of 0.2 percentage points from the previous month. Despite these positive indicators, economists like Gary Ng from Natixis remain cautious, noting a “cautious sentiment among consumers” reflected in year-to-date retail sales data.
From January to September, retail sales in China grew by 3.35%, similar to the growth rate reported for the period of January through August at 3.36%. The Chinese government has recently announced various measures to boost consumption and support the real estate sector. In addition, China also reported slightly better-than-expected gross domestic product data on Friday.
Investors have been eagerly awaiting stimulus measures as China’s economic growth has slowed, particularly in the aftermath of Covid-19 lockdowns. Market volatility persists as investors analyze these announcements and await further details on implementation. Gary Ng emphasized that the magnitude of interest rate cuts and fiscal policies will be crucial for a rebound in the economy and consumer confidence.
Overall, while there are positive signs in China’s retail sales and industrial production, the economy still faces challenges. The government’s efforts to stimulate consumption and support key sectors will play a significant role in shaping China’s economic recovery in the coming months.
— CNBC’s Anniek Bao contributed to this report.