Chinese consumer spending last month grew at a slower-than-expected pace, data released yesterday showed, with analysts saying that an uptick in COVID-19 cases dampened sentiment, leading to worries over a rebound in the world’s second-largest economy.
Retail sales rose 3.9 percent year-on-year, coming in below expectations and markedly slower than October’s 4.9 percent, the Chinese National Bureau of Statistics (NBS) said.
“The international environment has become more complex and severe, and there are still many constraints on domestic economic recovery,” NBS spokesman Fu Linghui (傅令輝) told reporters.
Photo: AFP
China’s economy faced the “triple pressures” of shrinking demand, supply shocks and weakening expectations, but is still expected to steadily improve, he added.
Fu had told reporters that “current international environment uncertainties are mounting, and the domestic economic recovery is still unstable and uneven.”
China’s economy grew only 0.2 percent from the previous three months in the third quarter, the weakest since a historic contraction in the first quarter of last year.
On the positive side, industrial production last month grew 3.8 percent year-on-year, in line with expectations of a pickup as disruptions from power shortages eased.
Outages in the past few months, which were linked to emission reduction targets, surging coal prices and supply shortages, had hit some factory production.
“Even though power supply shortages have eased recently, elevated input prices will linger ... and sluggish domestic demand could be a longer-term drag,” Moody’s Analytics said in a note.
Fixed-asset investment growth slowed to 5.2 percent in the first 11 months, with property investment rising 6 percent — down from the January-to-October period — amid falling home sales and tight financing rules.
Nomura Holdings Inc chief China economist Lu Ting (陸挺) said: “Wage arrears in property-related sectors, especially the construction sector, could also weigh on consumption.”
The Chinese property sector has been thrown into uncertainty as major developers such as the giant Evergrande Group (恆大集團) struggle to dig out from under crushing debt.
The country’s economic growth rate came in below expectations at 4.9 percent in the third quarter on the woes in the property sector and the crisis in the energy sector.
Consumer spending is likely to “remain subdued” in the coming months, including the upcoming Lunar New Year holiday, as authorities in some areas have encouraged consumers to avoid unnecessary travel, Lu said.
The extended holiday period, which falls at the beginning of February, is normally an important time for the travel and retail sectors.
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