China reports fastest industrial output growth in nearly two years

China posted its biggest industrial output expansion since February 2022 in November, though retail sales growth underwhelmed expectations, pointing to a patchy recovery in the world’s second-largest economy.

China’s industrial output grew 6.6% in November from a year earlier, according to the country’s National Bureau of Statistics Friday. This outpaced expectations for 5.6% in a Reuters poll and follows a 4.6% rise in October.

Retail sales climbed 10.1% in November from a year ago, the fastest pace of growth since May. Analysts had expected a 12.5% spike following a low base in 2022 when China’s zero-Covid curbs adversely impacted the economy. Retail sales rose 7.6% in October.

China’s urban unemployment rate stayed at 5% in November.

The latest retail sales numbers reinforce a trend of soft domestic consumer demand that’s evident from a slew of recent data, and was a central focus of a document that China’s leaders released Tuesday evening at the end of a meeting charting economic priorities for 2024.

China’s consumer prices fell in November at their fastest rate in three years, while producer price deflation extended into a 14th month. In U.S. dollar terms, imports fell by 0.6% year-on-year, missing Reuters’ forecast for a 3.3% rise.

The post-Covid recovery of the world’s second-largest economy has so far fallen short of expectations, plagued by a festering real estate crisis, debt risks and chronic youth unemployment. A slew of policy support measures have not sufficiently lifted economic sentiment, igniting calls for Beijing to amp up its stimulus amid fears of a deepening slowdown.

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