China’s Retail Sales Growth Slows to Nearly 3-Year Low, Highlighting Economic Challenges

China’s retail sales grew at their slowest pace in nearly three years in November, official data showed on Monday, underscoring the difficulties faced by leaders in reviving consumption in the world’s second-largest economy.

According to the National Bureau of Statistics (NBS), retail sales edged up 1.3% year-on-year in November, the weakest pace since December 2022 when stringent zero-COVID measures ended. This reading was well short of a Bloomberg forecast of 2.9%, which was the same as October’s figure.

The slowdown in retail sales highlights the tough battle leaders face in kickstarting consumption, a key driver of the domestic economy. Beijing has been seeking to revive sentiment in the domestic economy, which has been battered by a prolonged debt crisis in the country’s vast property market.

“Monday’s data point to broad-based weakness in domestic activity,” wrote Zichun Huang of Capital Economics in a note. “Policy support should help drive a partial recovery in the coming months, but this probably won’t prevent China’s growth from remaining weak across 2026 as a whole,” she added.

Despite the spending slump, China’s economy has been supported by robust exports, which have remained resilient in the face of this year’s fierce trade war with the United States. The boom in shipments has kept production humming in the manufacturing powerhouse, which has already reached a historic trade surplus of more than $1 trillion this year.

However, the official data showed that factory activity growth weakened last month, with industrial production sliding to 4.8% year-on-year – the slowest in more than a year. That figure narrowly missed a Bloomberg forecast of 5% and was also slightly down from 4.9% in October.

“External demand for Chinese goods appears to be picking up… but that was offset by weakness in domestic demand,” wrote Huang. The data highlights the challenges faced by policymakers in balancing the need to support economic growth while also addressing the structural issues facing the economy.