China’s economy is grappling with multiple problems including a property crisis and youth unemployment and despite it being the most festive time of the year shoppers have stopped buying an array of items.
The Chinese economy is still facing a crisis in its property market following the collapse of Chinese real estate developer Evergrande in 2021.
China is also grappling with huge debt and the longer-term threat of an aging population and now in the latest blow Chinese retail sales slowed last month.
Shoppers’ spending on non-essentials like cosmetics, alcohol and clothing has dropped.
Julian Evans-Pritchard of Capital Economics called China’s November data “disappointing”.
He said: “China’s economy appears to have slowed last month, despite tailwinds from recent policy easing.
“Growth still looks on course to pick up this quarter, but the disappointing November data underscores the challenge policymakers face in engineering a sustained rebound in growth.”
This news comes just days after Chinese leaders wrapped up a two-day planning meeting in Beijing to help stabilise its economy which included promises to do more to encourage people and businesses to spend and invest.
The National Bureau of Statistics reported that the economy was stable, with unemployment remaining at 5%.
“However, we must also see that the external environment is more complicated, domestic demand is insufficient, some enterprises are facing difficulties in production and operation, and the foundation for the sustained recovery of the economy still needs to be consolidated,” Fu Linghui, a spokesperson for the National Bureau of Statistics, told reporters.
Although purchases of appliances and vehicles surged thanks to a government programme to pay subsidies to entice people to replace older appliances and cars with newer, energy efficient versions and electric vehicles.
Auto sales rose 6.6% in November over a year earlier, but have fallen 0.7% year-on-year so far this year. Sales of appliances jumped more than 22%, and have climbed 9.6% so far this year.
Just today the government announced a plan to upgrade the entire retail system by 2029.
To modernize the industry, upgrade and transformation efforts targeting department stores, shopping centers, supermarkets, and community business hubs will be made, according to the document jointly issued by seven government departments including the Ministry of Commerce.
