China defies expectations with better-than-expected industry figures

The Chinese National Bureau of Statistics has released its latest figures on the morning of November 15th. Despite many signs pointing towards a slowdown for China being imminent in the face of numerous headwinds (see our article on the World Bank revising its outlook for China downward) the country produced more bullish figures than expected across almost all areas:

Encouraging numbers

In November, the total value added of industrial enterprises above the designated size grew by 6.6 percent year on year, 2.0 percentage points higher than that of last month, or up by 0.87 percent month on month. In terms of sectors, the value added of mining increased by 3.9 percent year on year, manufacturing went up by 6.7 percent and the production and supply of electricity, thermal power, gas and water grew by 9.9 percent. The value added of equipment manufacturing went up by 9.8 percent year on year, 3.6 percentage points faster than that of last month. The value added of high-tech manufacturing went up by 6.2 percent year on year, 4.4 percentage points faster.”

Chinese sales up too

Perhaps even more significantly for the economy, the report showed Chinese citizens increased spending again. In November, the total retail sales of consumer goods reached 4,250.5 billion yuan, up by over ten percent year on year – in both urban and rural areas alike. This represents 2.5 percent higher spending countrywide than that of October 2023.

Other signs pointing away from any potential future recessions or stagflation were also there: unemployment figures remained flat at five percent, the Index of Services Production increased by 9.3 percent year on year, while private investment (except, notably, into property) was up more than nine percent.

Housing remains a concern

In spite of these optimistic figures, there was still trouble lurking in the real estate figures, which showed that investment in real estate development declined by 9.4 percent year-on-year from January to October 2023.

The report concluded by saying:

Generally speaking, in November, as the macroeconomic policies have been showing effects, the national economy continued to recover and progress for the better. However, we should be aware that many unstable and uncertain factors in the external environment still exist, the domestic demand remains insufficient and the foundation for economic recovery and growth needs to be further consolidated.”

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