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China's IP surprises, Retail Sales and FAI disappoint

China's industrial production for November exceeded expectations, posting a 6.6% year-over-year (yoy) increase compared to the anticipated 5.6%. However, retail sales and fixed asset investment were underwhelming, recording gains of only 10.1% and 2.9% yoy, respectively.

Although the industrial production figures surpassed expectations, they may be somewhat misleading due to distortions from base effects caused by the extensive Covid lockdowns in the latter part of the previous year. Additionally, the property sector continues to significantly hinder economic growth, as evidenced by the double-digit year-over-year decline in new home sales volumes.

Our take: At first glance, the data appears more positive than it actually is, largely due to the aforementioned base effects. Domestic demand remains tepid, and retail sales have declined on a month-over-month basis. A more robust fiscal stimulus is necessary to rejuvenate the economy, particularly the struggling property sector. #ChinaEconomy #IndustrialGrowth #PropertyMarket #EconomicStimulus #MarketInsights


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