IP growth for November remained strong at 4.8% year-on-year thanks to a rebound in export growth following the trade agreement. Real estate and infrastructure fell even deeper. Policymakers pledged to stabilize investment. Retail sales of goods fell as the impact of the policy faded, but sales of services rose, Standard Chartered economists Hunter Chan and Shuang Ding reported.
Increased sense of urgency to stabilize demand
“November real activity data point to a continuing (strong) supply-demand (weak) imbalance in China. Industrial production growth accelerated month-on-month in November thanks to a rebound in export growth, while retail sales and fixed asset investment (FAI) fell month-on-month, with the latter declining for 10 consecutive months. This imbalance was highlighted as a key domestic challenge at the 2025 Central Economic Work Conference (CEWC).”
“A rebound in export growth (5.9% y/y) supported production activity. Intellectual property growth fell by 0.1 percentage point to 4.8% y/y with the two-year CAGR remaining at 5.1% y/y according to our estimates. Meanwhile, services production index growth fell by 0.6 basis points to 4.2% y/y, likely impacted by real estate, accommodation and tourism services. Investment and retail sales turned weaker. Foreign direct investment fell deeper due to 2.6% y/y in the period from 11 months to 2025, mainly influenced by investment in real estate (-15.9% y/y) and infrastructure (-1.1% y/y) and retail sales growth fell to the slowest rate after 2022 at 1.3% y/y, partly due to fading support from the consumer goods trade program, normalization of gold and other jewelry sales and accelerating growth.”
“Weaker-than-expected October-November data suggest lower growth momentum on a quarterly basis than in the third quarter. We expect annual growth in the fourth quarter and 2025 at 4.4% y/y and 4.9%, respectively. The Consumer Protection and Investment Stabilization Commission has pledged to expand central budget spending. The government will also continue to issue special long-term central bonds to support consumption in 2026,” the Consumer Protection and Investment Stabilization Committee pledged.
