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Chongqing, China – November 5, 2023 – Tall buildings are seen in downtown Chongqing, China on November 5, 2023. (Photo by Costfoto/Nurfoto via Getty Images)
Nurfoto | Nurfoto | getty images
BEIJING – China on Wednesday reported better-than-expected retail sales and industrial data for October, while real estate conditions worsened.
Retail sales last month rose 7.6% from a year earlier, exceeding the 7% growth forecast in a Reuters poll.
Industrial output rose 4.6% year-on-year in October, faster than the 4.4% pace predicted by a Reuters poll.
Real estate investment for the first 10 months of the year rose 2.9% from a year earlier, missing expectations for a 3.1% increase.
Investment in real estate declined by 9.3% during that period, a steeper decline than the 9.1% decline recorded in the first nine months of the year.
The National Bureau of Statistics stated that the urban unemployment rate was 5%. That was unchanged from September. The bureau has suspended reporting the unemployment rate for young people since the summer.
In retail sales, sales of sports and other leisure entertainment products saw a 25.7% increase in October from a year earlier, the data showed.
Catering, as well as alcohol and tobacco sales, saw double-digit growth. Auto-related sales rose 11.4% from a year earlier.
The first week of October was the last major public holiday of the year in China, known as Golden Week. Official data shows domestic tourism spending almost recovered to 2019 levels, but this was partly due to more people staying within the country as overseas travel still did not fully return to pre-pandemic levels Were.
Over the past few weeks, top policymakers have announced more support for the economy, primarily struggling local governments. Beijing has also taken steps to stabilize the huge real estate sector, which is expected to become a smaller share of the economy in the long term.
The International Monetary Fund cited Beijing’s policy announcements last week as the reason for raising China’s growth forecast for the year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.
When it comes to real estate, “the pressure remains,” IMF First Deputy Managing Director Gita Gopinath told CNBC in an exclusive interview.
He said, “There is a lot of tension in the market. There is weakness in the market.” “It’s not going to go away that quickly. It’s going to take some more time to get back to a more sustainable shape.”
Real estate and related sectors account for about a quarter of China’s GDP.
UBS analysts estimate the share has fallen to about 22% this year. Sales of new homes have declined, while large property developers such as Country Garden have defaulted on their debt.
