China’s domestic spending continues to grow in November 2020

China’s retail sales grew in November, official data showed on Tuesday, December 15, as consumers continued their return to spending with the country’s COVID-19 outbreak largely brought under control.

Retail sales in the world’s second largest economy rose 5% on-year last month, the National Bureau of Statistics (NBS) said.

The figure was in line with forecasts by analysts polled by Bloomberg and up from 4.3% growth last month on the back of a weeklong national holiday in October.

NBS spokesman Fu Linghui said at a press briefing that China’s economy was seeing a “steady recovery” from the coronavirus pandemic, which first emerged in central China late last year.

But he warned that “given the resurgence of the epidemic, the world economic recovery is facing headwinds with increasing instabilities and uncertainties.”

Although China has largely brought the coronavirus under control, spending has been slower to recover as the world grapples with the impact of the pandemic, in particular the hospitality industry.

Tuesday’s data showed that catering sector revenue growth was down by 0.6% in November after turning positive for the first time this year a month earlier.

Industrial production growth in November grew slightly to 7%, ticking up from 6.9% last month.

Iris Pang, ING’s chief economist for Greater China, told Agence France-Presse that mid-end consumers were supporting retail sales, in particular in the cosmetics and jewelry sectors, while medical items had continued to boost industrial production growth. 

Meanwhile, the urban unemployment rate – a key concern with a large number of graduates entering the market this year after the pandemic hit – fell slightly to 5.2% in November, the 4th straight month.

However, experts have cautioned the figure could be higher due to large numbers of people in China’s informal workforce.

Julian Evans-Pritchard, senior economist at Capital Economics, said the unemployment rate was now back to pre-virus levels and was underpinning China’s retail sales growth.

“We think activity will remain strong in the near term as households run down the excess savings they accumulated this year,” he said. – Rappler.com