China’s economy shows signs of consumption rebound

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China’s economy is showing signs of recovery, driven by a rebound in consumption. The country’s National Bureau of Statistics announced on Wednesday that retail sales in China hit 4.33 trillion yuan ($597.5 billion) in October 2023, up 7.6 percent from a year earlier and exceeding market expectations of 7 percent.

Retail sales are a measure of sales at various retail outlets, including department stores and convenience stores, and are a good indicator of the domestic economy.

China’s retail sales growth hit a yearly high of 18.4 percent in April before declining to 2.5 percent in July but have been on an upward trend since August. Industrial production also grew 4.6 percent in October, beating market expectations of 4.3 percent and was higher than the 4.5 percent recorded in September. Equipment manufacturing rose 6.2 percent from a year earlier, marking the third consecutive month of growth. Production in future industries such as solar cells and robots saw a significant increase.

The unemployment rate remained at 5 percent, the same level as in September. The announcement did not disclose age-specific unemployment rates, including one for the youth (16-24 years old). China has not released its youth unemployment rate since July after it hit a record high of 21.3 percent in June. The real estate market slump continues in the country, with cumulative sales area and sales amount of newly developed homes in the first 10 months of 2023 down 7.8 percent and 4.9 percent respectively, from the same period a year ago.

Fixed asset investment also remained sluggish. Cumulative fixed asset investment from January to October was up 2.9 percent year-on-year. However, given that the figure from January to September was 3.1 percent, the level in October can be considered relatively sluggish.

“Although the economy remained generally stable in October, it is necessary to further solidify the foundation for economic recovery, given uncertain external factors and persistently weak domestic demand,” the National Bureau of Statistics of China said. “We will seek to expand domestic demand, prevent risks, and promote the qualitative and quantitative improvement and growth of the economy.”