China December: Retail sales +3.7% y/y (exp +3.5%) Industrial output +6.2% y/y (exp +5.4%)

China Q4 GDP +1.6% q/q

• expected: 1.6%
• previous: 0.9%
• For the y/y +5.4% in Q4

China GDP for 2024 as a whole is 5.0% y/y. Easily hitting target. Par for the course for China isn’t it?

Also, December 2024 data:

Industrial Production +6.2% y/y, a strong beat

• expected: 5.4%, previous: 5.4%

Retail Sales +3.7% y/y, also a beat

• expected: 3.5%, previous: 3%

Fixed Asset Investment (YTD) +3.2% y/y for a slight miss

• expected: 3.3%, previous: 3.3%

Urban employment rate in December is 5.1%, up from November’s 5.0%.

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Background (repeating what I posted earlier):

In November 2024, China’s economic indicators presented a mixed picture:

• Retail Sales: Increased by 3% year-on-year, a slowdown from October’s 4.8% growth and below the anticipated 4.6%. This deceleration suggests that consumer demand remains subdued, despite government efforts to stimulate spending.

• Industrial Production: Rose by 5.4% year-on-year, slightly up from October’s 5.3%, aligning with market expectations. This uptick indicates some resilience in the industrial sector, potentially reflecting the impact of recent policy measures aimed at bolstering economic activity.

• Fixed Asset Investment (FAI): Grew by 3.3% year-on-year in the January to November period, marginally below the 3.4% growth recorded in the first ten months. This slight decline points to cautious investment sentiment amid ongoing economic uncertainties.

These figures highlight the challenges facing China’s economy, with robust industrial output juxtaposed against weakening consumer spending and investment. The data underscores the need for continued policy support to sustain economic recovery and address underlying structural issues.

In a sign of increased domestic demand, data from China’s Ministry of Commerce on Wednesday showed sales revenue of consumer goods under China’s policy-backed trade-in program jumped. On January 8 Chinese authorities announced measures to expand the scope of the consumer goods trade-in program. This is part of a drive to bolster domestic demand and spur economic growth. While today’s figures won’t reflect the impact of these new measures the moves auger well for January data.

Q4 GDP data is also published.

For the first three quarters of 2024:

• Q1 2024: The economy expanded by 5.3% year-on-year, exceeding market expectations of 5.0%.

• Q2: Growth moderated to 4.7% year-on-year, slightly below the anticipated 5.1%.

• Q3: The GDP growth rate further eased to 4.6% year-on-year, marking the slowest pace since early 2023.

Cumulatively, China’s GDP grew by 4.8% year-on-year in the first three quarters of 2024. This trajectory indicates a gradual deceleration in economic growth throughout 2024, influenced by factors such as a downturn in the property sector, subdued domestic demand, and external challenges.

This article was written by Eamonn Sheridan at www.forexlive.com.