Is China’s economy really stable amid signs of improvement?

The Chinese economy showed mixed signals in November 2024, according to a recent government report released on a Monday. While retail sales increased by 3 percent year-on-year, this figure represented a decline from an earlier growth of 4.8 percent in October. Although overall consumer spending was lackluster, there was a notable surge in certain categories such as appliances and vehicles, driven by government incentive programs aimed at stimulating purchases of newer models. Specifically, vehicle sales rose by 6.6 percent in November, while appliance sales surged over 22 percent in the same period. Despite some positive indicators, challenges persisted within the economy. Factory output barely changed, increasing by only 5.4 percent compared to the previous month, and fixed asset investment, particularly in the property sector, witnessed a downturn. Officials indicated a drop in property prices and home sales across many cities, highlighting ongoing struggles in the real estate market, exacerbated by previous regulatory measures that limited excessive borrowing by developers. As the National Bureau of Statistics spokesperson Fu Linghui addressed reporters, he underscored the complicated external environment India was facing. Domestic demand remained insufficient, and many enterprises continued to grapple with production and operational difficulties. He further emphasized the importance of consolidating the foundation for a sustained economic recovery as the country moves forward, especially with concerns about potential tariff hikes introduced by the incoming U.S. government led by President-elect Donald Trump. The government has acknowledged the pressing need for a proactive approach to bolster the economy but refrained from detailing specific stimulus measures following their recent two-day planning meeting. Nevertheless, expectations remained intact for the economy to achieve an approximately 5 percent annual growth target for this year, even as the country copes with the impacts of the COVID-19 pandemic and its subsequent disruptions to jobs and businesses.