China's economy falters in October
By Abigail Townsend
Date: Tuesday 15 Nov 2022
(Sharecast News) - China's economy lost momentum in October, official data showed on Tuesday, hit by both Covid restrictions and weaker demand.
According to the National Bureau of Statistics, industrial production rose 5.0% year-on-year, down from September's growth of 6.3% and below forecasts of 5.3%.
Retail sales, meanwhile, fell 0.5%, a sharp contraction on September's growth of 2.5% and below expectations for a 1% rise. It was the first decline since May, when Shanghai was under lockdown.
Beijing has continued to pursue a policy of zero-Covid, which has seen stringent rolling lockdowns across the country. An NBS spokesman acknowledged that containment measures were putting "huge" pressure on the economy, Reuters reported.
Speaking at a press conference in Beijing, he added: "The impact from the triple pressures on economic operations - shrinking demand, supply shocks and weakening expectations - is growing."
Government measures to curb excessive borrowing in the country's red-hot property sector - once one of the main drivers of China's economic growth - have also weighed heavily this year, while overseas demand has started soften as the global economic outlook darkens. The NBS said property investment slumped 16% in October, following a 12.1% fall in September. It was the biggest drop since the start of 2020
Pantheon Macroeconomics said: "China has been a two-speed economy for much of this year, with domestic demand suppressed by zero-Covid policy and the property sector malaise, while output was cushioned by export demand and stimulus via infrastructure and manufacturing fixed asset investment.
"October saw a broad slowdown, as even the previous growth drivers weakened: exports fell 05% year-on-year, the first decline since May 2020, as global demand ebbed."
Fixed asset investment increased by 5.8% in the year-to-date in October year-on-year, narrowly missing consensus for a 5.9% rise.
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