China industrial production, retail sales miss estimates in October
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By Ambar Warrick
Investing.com— Chinese industrial production grew less than expected in October, while retail sales unexpectedly shrank amid renewed disruptions from anti-COVID measures, heralding more weakness in the world’s second-largest economy.
Chinese industrial production grew 5% in October, data showed on Tuesday, missing expectations of 5.2% and much slower than September’s reading of 6.3%.
The weak reading comes as the country introduced new restrictions in several major industrial hubs, including financial capital Shanghai, to battle a resurgence in COVID-19 cases. Several factories were either shut or operating at limited capacity, while citizens faced strict curbs on movement.
The data also follows earlier purchasing managers index readings that showed that Chinese business activity shrank in October.
While the government recently eased some quarantine and movement restrictions under its strict zero-COVID policy, the renewed outbreak likely indicates that officials will be reluctant in scrapping the policy entirely.
The zero-COVID policy is at the heart of Beijing’s economic woes this year, as a series of strict anti-COVID lockdowns ground economic activity to a halt.
Business confidence was also severely dented this year, with firms now turning more reluctant with their capital expenditures. Data on Tuesday showed Chinese fixed asset investment grew at a slightly lower-than-expected 5.8% in October.
On the consumer side, retail sales shrank 0.5% in October, missing estimates for growth of 1% and tumbling from last month’s reading of 2.5%. COVID disruptions, a slump in the property market, and worsening sentiment also saw consumers tightening their pockets.
China’s unemployment rate remained steady at 5.5%.
Tuesday’s dismal data indicates that a brief recovery in the Chinese economy, after the lifting of some COVID restrictions in June and July, appears to be running out of steam. Renewed COVID lockdowns are likely to cause more economic ructions in the near term.
The Chinese yuan rose 0.3% after the data, as the People’s Bank of China also kept its interest rates unchanged on Tuesday.
