Real-sector data is mixed in November

Latest reading: Industrial output expanded 5.4% in year-on-year terms in November, up from 5.3% in October and overshooting market expectations. The result came on the back of a faster rise in manufacturing output outweighing softer utilities and mining activity. Meanwhile, retail sales growth slowed to 3.0% in November from 4.8% in October, undershooting market expectations by a considerable margin. Thirdly, in January–November, fixed-asset investment increased 3.3%, below market expectations, with declining private investment partly offsetting robust investment by state firms. Finally, new homes sales ticked up in November while housing prices fell at a softer pace. This hints at an incipient upturn in the real estate market following a slew of recent government stimulus measures. However, other housing indicators remained in double-digit contraction.

Panelist insight: On the data and outlook, ING’s Lynn Song said: “Despite data coming in a little softer than expectations, with only one month of data still to come, China will likely manage to complete its around 5% growth objective for 2024. We maintain our forecast of 4.8% YoY growth in 2024. The Politburo meeting and Central Economic Work Conference from last week signalled that we will see a strong policy support push next year […] The fiscal deficit target and the special government bond issuance targets were both raised, which along with November's RMB 10tn debt package should create more room for fiscal stimulus in 2025.”

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