Is China back on track? Retail sales push after exports boost fuels Beijing’s 5% GDP growth hopes

China’s retail sales, a key indicator of consumption, grew at its fastest pace in October on the back of Beijing’s stimulus measures, showed the official figures released on Friday.

As per the National Bureau of Statistics (NBS), China’s retail sales expanded 4.8 per cent on-year in October, speeding up from the 3.2 per cent growth in September.

China’s retail sales reading beats expectations

The retail sales October reading beat expectations of 3.9 per cent growth projected by economists polled by Chinese financial data provider Wind and also represents the best since February.

The above expectation number shows an encouraging sign for China as it looks to boost sluggish consumption and also increases hope that the world’s second-largest economy can accomplish its annual economic growth target of around 5 per cent.

A slew of measures have been announced by officials in China since late September including interest rate cuts and debt swaps intended to boost economic activity in the country that has been struggling to regain momentum since the Covid-19 pandemic.

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More initiatives were introduced in October, including easing purchase restrictions and expanding funding for troubled property developers.

In a statement, NBS spokesperson Fu Linghui said that in October “positive factors accumulated and increased and the national economy was stable, with progress and growth”.

China’s overall fixed assets investment, including major items – infrastructure construction, manufacturing and property spending – rose by 3.4 per cent in the first 10 months of the year, unchanged from January to September.

‘Be aware’

Linghui also warned, saying: “We, however, should be aware that the external environment is increasingly complicated and severe, demand is still weak at home, and the foundation for continuous economic recovery needs to be strengthened.”

Meanwhile, property investment, which remains a major drag of the economy, fell by 10.3 per cent on-year in the first 10 months of the year, compared with the 10.1 per cent fall in the first three quarters of 2024.

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China exports boom

Recently, China also released its exports data for October which rose at their fastest pace in 19 months.

China’s exports rose by 12.7 per cent year on year to $309.06 billion in October — the highest jump since March 2023 when they rose 14.8 per cent.

Imports, however, fell by a more-than-expected 2.3 per cent in October.

Meanwhile, China’s overall urban unemployment rate for October fell slightly to 5 per cent from 5.1 per cent in September.

Industrial production growth, meanwhile, edged down to 5.3 per cent in October from 5.4 per cent the previous month.

With barely 45 days left for the year to end, China has been bracing up with its efforts and projecting confidence in reaching its annual gross domestic product (GDP) growth target of “around 5 per cent”.

With inputs from agencies.