China’s retail sales go up 7.6% in October, beating expectations, as economic growth momentum gains pace
Published: Nov 15, 2023 10:51 AM
The restaurants in a commercial district in Beijing are all full on May 2, 2023. Photo:VCG

The restaurants in a commercial district in Beijing are all full. Photo:VCG

China on Wednesday posted better-than-expected economic data for October, with the recovery momentum in the world's second largest economy continuing to gain pace through to the fourth quarter, thanks to a raft of fiscal and financial stimulus measures aimed at ramping up domestic investment and consumption and arresting the downward pressure in the real estate sector.

The strong data showed that the Chinese economy has kept its recovery momentum seen in the third quarter, as officials and economists estimate that the country is poised to meet the annual GDP growth target of around 5 percent for 2023. 

And, the newly released data offers further proof that the "Chinese economic collapse" narrative hyped by some Western media is untenable and ill-intended, analysts said.

China's value-added industrial output increased by 4.6 percent year-on-year in October, higher than a reading of 4.5 percent in September.

Retail sales grew by an impressive 7.6 percent, accelerating from September's 5.5 percent growth, according to the National Bureau of Statistics (NBS).

The key economic indicators were released after China reported stable foreign trade data last week, though amid a declining purchasing managers' index for manufacturers and contracting consumer prices for October. On Monday, China released better-than-expected overall banking credit data for October.

The closely watched data was seen by analysts as gauging the resilience of the economic recovery in the fourth quarter, of which October is the first month.

Generally speaking, the Chinese economy has displayed signs of "mild climbing up" in October, Tian Yun, a veteran economist based in Beijing, told the Global Times. "The domestic consumption has continued to show robust recovery in October, boosted by the travel boom in the 'Golden Week' in early October and a sustained spike in automobile purchases," Tian said.

The data beat the predictions by the Reuters poll of economists, which forecast 4.3 percent growth for industrial output and 7 percent growth for retail sales for October. They also forecast 3.1 percent growth for fixed-asset investment in the January-October period.

Highlighting some lingering challenges, the fixed-asset investment in the first 10 months posted moderate growth of 2.9 percent, down from 3.1 percent in the January-September period.

"The national economy has sustained good momentum of sustained recovery with major indicators continuing to improve and overall performance remaining stable" Liu Aihua, an NBS spokesperson, told a press conference on Wednesday accompanying the release of the economic data.

While taking note of challenges at home and abroad, Liu said that at the next stage, China will take solid steps to implement macro readjustment in a more targeted and effective way, and ramp up efforts to expand domestic demand, boost consumer and investor confidence and fend off risks.   

Stabilizing relations between China and the US should help strengthen economic and trade exchanges and contribute to the steady recovery of both economies, analysts noted.

Tian said the whole-year GDP reading should come in over 5 percent this year -- probably reaching between 5.2 and 5.4 percent -- given the central government's decision to issue one trillion yuan of special treasury bonds. It will have been a hard-won achievement amid subdued global demand and the adjustment in China's property market.

"The main driver of the economy will be home consumption, which is expected to hit over 4 trillion yuan this year," Tian said.

Chinese economists have refuted exaggerations made by some foreign media alleging that China's economy is encountering "a crisis." 

The economic recovery has been sound, Chen Fengying, an economist and former director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations, told the Global Times on Wednesday. But Chen added that the government's supportive policies still need to be effectively implemented to shore up growth next year.

Last week, the IMF moved to raise its projected growth rate for the Chinese economy to 5.4 percent and 4.6 percent for 2023 and 2024, respectively, up by 0.4 percentage points compared with the organization's October projections.

Global Times