China’s economy stagnated in November

China’s economic activity in November showed its weakest growth in more than a year, Reuters reports. According to the National Bureau of Statistics, industrial production in November grew 4.8% year-on-year. This is the lowest rate since August 2024 and below the 4.9% growth in October. Analysts polled by Reuters had forecast 5.0%.

“Retail sales increased by 1.3%, the slowest growth rate since December 2022. In October, the figure was 2.9%, while market expectations were for 2.8%,” notes Roman Lukyanchikov, an analyst at Freedom Finance Global.

The weakening dynamics are occurring amid a reduction in consumer subsidies, a protracted crisis in the real estate market, and the risk of deflation in industry, Reuters notes. Under these circumstances, the government is relying on exports as the main source of growth, but the sustainability of this model is questionable due to China’s roughly $1 trillion trade surplus and plans by trading partners to impose import restrictions.

Last week, the International Monetary Fund called on Beijing to accelerate structural reforms and more actively address the problems in the real estate market, which accounts for approximately 70% of the country’s household wealth. New home prices continued to decline in November, while investment and sales in the sector remained under pressure.