China’s retail sales growth slows, factory production picks up

China’s retail sales growth was weaker than expected in November as consumers were cautious as domestic cases of the coronavirus resurfaced, official data showed on Wednesday, but industrial production resumed after the decline in prices. Power cuts.

A rebound in the world’s second-largest economy has run out of steam this year, with indicators remaining muted last month, after the country quickly recovered from the coronavirus aided by strict border controls and targeted closures.

But economists noted that a recent nationwide surge, where viral infections have affected 21 provinces and regions, has likely led to more cautious consumer behavior as containment measures take effect.

Retail sales rose 3.9% year-on-year, the National Bureau of Statistics (NBS) said on Wednesday, below expectations and significantly slower than October’s 4.9% rate.

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“The international environment has become more complex and harsher, and there are still many constraints on the recovery of the national economy,” NBS said in a statement.

“Passenger traffic data suggests consumers have become more cautious,” said Mark Williams, chief economist for Asia at Capital Economics, in a recent memo.

He added that there had also been “negative signals” from Singles Day – an unofficial annual shopping party similar to Black Friday – and numbers such as car and movie ticket sales.

Industrial production growth reached 3.8% in November, according to a Bloomberg consensus poll.

This came as manufacturing activity showed signs of rebounding as disruptions from power shortages eased.

Power outages in recent months affected by emission reduction targets, soaring coal prices and supply shortages have affected output at some factories.

Meanwhile, the urban unemployment rate soared to 5% last month, from 4.9%, according to official data.

“Even though power shortages have eased recently, high input prices will persist through the first half of 2022, and weak domestic demand could be a drag in the longer term,” Moody’s Analytics warned on Monday.

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