- Lately, key policymakers have announced increased support for the economy, particularly for struggling local governments.
- The International Monetary Fund raised its China growth forecast to 5.4% for the year and to 4.6% for 2024, crediting Beijing’s policy announcements as a reason for the adjustment.
CHONGQING, CHINA – NOVEMBER 5, 2023 – High-rise buildings are seen in downtown Chongqing, China, November 5, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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China reported better-than-expected retail sales and industrial data for October, with retail sales growing by 7.6% and industrial production rising by 4.6% year-on-year.
Fixed asset investment for the first 10 months of the year grew by 2.9% from a year ago, missing expectations for a 3.1% increase.
Investment into real estate fell by 9.3%, and the urban unemployment rate remained at 5% in October.
Within retail sales, sports and other leisure entertainment products saw sales surge by 25.7% in October from a year ago, while catering, alcohol, and tobacco sales also reported double-digit surges.
The first week of October, known as Golden Week in China, marked the final big public holiday for the year, with domestic tourism spending nearly recovering to 2019 levels.
Recently, top policymakers have unveiled additional support for the economy, especially for struggling local governments. Beijing has also taken measures to stabilize the real estate sector, expected to become a smaller part of the economy in the long term.
The International Monetary Fund raised its China growth forecast for the year and for 2024, citing Beijing’s policy announcements as the reason for the adjustment. Gita Gopinath, the IMF’s First Deputy Managing Director, told CNBC in an exclusive interview that the real estate market is expected to remain under pressure and will take time to transition back to a more sustainable size.
Real estate and related sectors have accounted for about a quarter of China’s gross domestic product, but that share has declined to about 22% this year. New home sales have dropped, and large property developers such as Country Garden have defaulted on their debt.
