The National Bureau of Statistics (NBS) in China has published trade and economic data for October 2024, revealing a mixed economic picture. Retail sales grew by 4.8 percent, the fastest pace since February 2024, driven by holiday shopping and Singles’ Day promotions. However, industrial output growth slowed to 5.3 percent, missing expectations, and the property sector remained weak despite recent policy interventions.
Economists note the challenges of sustaining growth amidst rising global uncertainties. The return of Donald Trump as President-elect in the US, with threats of significant tariffs on imports, could pose headwinds for trade-dependent industries. Analysts expect additional stimulus measures, such as fiscal expansion and interest rate cuts, to address these pressures.
Key Economic Data Highlights for October 2024
GDP: 4.8% year-on-year (YoY) growth for the first three quarters of 2024.
Industrial output: +5.3% YoY.
Services value added: +6.3% YoY.
Retail sales: RMB 4.54 trillion (US$627.56 billion), +4.8% YoY, +1.6% from September.
Foreign trade: Total imports and exports reached US$522.4 billion, with exports rising 12.7% YoY and imports dropping 2.3% YoY.
Fixed asset investment: +3.4% YoY (January to October).
Disposable income per capita: RMB 30,941 (US$2,907), +5.2% YoY (January to September).
Unemployment rate: 5.0%, down 0.1% from September.
CPI: +0.3% YoY.
Industrial Performance: Mixed Growth Across Sectors in China
In October, industrial value added (IVA) rose 5.3 percent YoY, a slight deceleration from September’s 5.4 percent. While manufacturing and the utilities sector each grew by 5.4 percent YoY, the mining sector expanded at a slower pace of 4.6 percent. Advanced sectors such as equipment manufacturing and high-tech manufacturing outperformed, growing by 6.6 percent and 9.4 percent YoY, respectively.
Key Product Growth:
New energy vehicles: +48.6%.
Industrial robots: +33.4%.
Integrated circuits: +11.8%.
Private enterprises led industrial growth with a 4.8 percent YoY increase, while state-owned enterprises saw a more modest 3.8 percent rise. Foreign-invested enterprises, including those funded by Hong Kong, Macao, and Taiwan, grew by 2.9 percent.
The manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 percent, indicating improved sentiment, while the business activity expectations index reached 54.0 percent, reflecting optimism for future production.
Services Sector: Accelerated Growth
The services production index grew by 6.3 percent YoY in October, a notable acceleration from September’s 5.1 percent. Modern service industries, such as financial services (+10.2%), IT services (+9.5%), and leasing/business services (+8.8%), led the growth.
Key indicators:
Business activity index: 50.1% in October (+0.2 percentage points from September).
Business activity expectations index: 56.2%, reflecting strong optimism.
High-performing industries included transportation, postal services, capital markets, and environmental management, all exceeding a 55.0 percent activity index.
Retail Sales: Surpassing Expectations
Retail sales in China grew by 4.8 percent YoY in October, exceeding forecasts of 3.8 percent and improving from September’s 3.2 percent increase. Total retail sales from January to October reached RMB 39.90 trillion (US$5.46 trillion), a 3.5 percent YoY increase.
Urban retail sales rose by 4.7 percent YoY, while rural retail sales grew by 4.9 percent YoY. Key product categories saw significant growth, driven by policies such as the "old-for-new" replacement scheme:
Cosmetics: +40.1%.
Sports and entertainment products: +26.7%.
Household appliances: +39.2%.
Cultural and office supplies: +18.0%.
Furniture: +7.4%.
Online retail sales remained strong, reaching RMB 12.36 trillion (US$1.69 trillion), an 8.8 percent YoY increase, with online sales of physical goods accounting for 25.9 percent of total retail sales.
Foreign Trade: Export Surge and Import Decline
Exports rose by 12.7 percent YoY to US$309.06 billion, the fastest growth in 19 months, driven by seasonal demand, favourable weather, and competitive pricing. Imports, however, fell by 2.3 percent YoY to US$213.8 billion, reflecting ongoing domestic demand challenges.
Export destinations:
US: +8.1%.
EU: +12.7%.
ASEAN: +15.8%.
Russia: +27%.
Vehicle exports, a key sector, rose by 11 percent YoY.
Despite strong export performance, prolonged property market struggles and weakening domestic consumption remain concerns for sustaining trade momentum.
Fixed Asset Investment: Stability Amid Support
From January to October, fixed asset investment (FAI) increased by 3.4 percent YoY, with infrastructure investment growing by 4.3 percent YoY and manufacturing investment rising by 9.3 percent YoY. Investment in high-tech industries demonstrated robust growth, with high-tech services increasing by 10.6 percent YoY and high-tech manufacturing by 8.8 percent YoY.
Economic Outlook: Recovery Amid Challenges
The China National Development and Reform Commission (NDRC) expects continued recovery in November and December, driven by policy support and improving business confidence. GDP growth of 4.8 percent for the first three quarters aligns with the government’s annual target of 5 percent, though external forecasts suggest achieving this target may be challenging.
Analysts predict further monetary easing and fiscal expansion in 2025 as policymakers navigate ongoing economic headwinds, including deflation risks and a prolonged property market crisis. While short-term measures provide relief, their impact on long-term growth remains uncertain.
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