November 19, 2025, Shanghai, China: A boat sails on the Huangpu River passing through downtown Shanghai. The tallest building on the skyline is the Shanghai Tower (back).
Bernd von Utrzenka | Picture Alliance | Getty Images
China’s economic slowdown deepened in November, with weaker-than-expected growth in consumption, investment and industrial production as authorities sought to revive demand and stem a decline in the real estate sector while reining in supply.
Retail sales rose 1.3% last month from a year earlier, well below the Reuters median estimate of 2.8% growth and slowing from the previous month’s 2.9% rise.
Industrial production rose 4.8% in November compared to the same month last year, falling short of the expected 5% rise and marking the slowest growth since August 2024.
Investment in fixed assets, including real estate, fell 2.6% in the January-November period from a year earlier, much smaller than the 2.3% decline expected by economists.
The drop deepened from 1.7% in the January-October period dating back to 1992, making it the sharpest drop since the pandemic began in 2020, according to data from Wind Information.
“The contraction in fixed asset investment and the decline in real estate prices in recent months has been reflected in consumer sentiment,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note after the data, adding that he expects more supportive fiscal and monetary stimulus measures to be taken in the first quarter of next year.
As the real estate recession drags on, real estate investment fell 15.9% in the first 11 months of this year, sharper than the 10.3% decline in the January-October period.
Another sign that the sector’s slump is still searching for a bottom was the sharp decline in home prices across 70 major cities in November. In first-tier cities such as Beijing, Guangzhou and Shenzhen, new home prices fell by 1.2%, while existing home prices fell by 5.8% from the previous year.
Meanwhile, economists at Golman Sachs said in a preview last week that the decline in auto sales, combined with the “negative distortion” effect of an earlier-than-usual Singles’ Day online shopping festival that pushed demand forward from November to October, was a major drag on overall retail sales.
Retail car sales fell for the first time in three years in November to 2.23 million units, down 8.1% from a year earlier, as many local governments suspended trade-in subsidies, according to data from the China Automobile Dealers Association.
Several online shopping sites extended their promotional periods from early October to November 11 to stimulate consumer spending, making it the longest Singles’ Day sale period on record. Still, sales performance was disappointing as consumers tightened their wallet strings, with total distribution volume only increasing 12% compared to last year’s 20% increase, according to Sintung data.
request rebalance
Chinese policymakers have pledged further policy support to boost domestic demand and encourage consumption and investment over the next year. The Ministry of Finance announced in a statement on Saturday that it plans to issue super-long-term special bonds next year to finance projects that strengthen national security.
Proceeds also go towards equipment upgrades and trade-in programs for consumer products. The ministry also promised to increase the investment budget to ease the slump in fixed asset investment in recent months.
However, analysts appear less optimistic as the Chinese government has yet to offer any meaningful economic stimulus.
“Even with targeted policy support in place, without clear improvements in employment prospects and wage growth, it will be difficult for consumption to recover meaningfully,” said Xavier Wong, market analyst at asset management firm eToro.
Eswar Prasad, a professor of economics at Cornell University and a senior fellow at the Brookings Institution, expressed concern about the sustainability of China’s economic growth. In an op-ed published Sunday, the economist advocated structural reforms to rebalance the economy, including measures to support the labor market, strengthen social safety nets and strengthen private enterprise.
“It is clear that the government wants to rebalance growth and understands what is needed to boost household consumption and increase productivity. However, there is little sense of urgency and no clear timeline for concrete policy measures to achieve these goals,” Prasad said.
The urban unemployment rate in November was 5.1%, unchanged from the previous month. Youth unemployment is more worrying, with the latest reading in October at 17.3%.
Still, thanks to a surge in exports to markets outside the United States, China’s economy appears to be on track to meet its official growth target of “about 5%,” even as tariff tensions with the United States weigh on shipments to the world’s largest consumer market.
China’s trade surplus soared to a record $1.1 trillion in November, breaking the 2024 full-year record of $992.2 billion in just 11 months, raising concerns about the country’s dependence on external demand to maintain export competitiveness and a weak currency.
International Monetary Fund Managing Director Kristalina Georgieva last week called on China to “accelerate” support for domestic consumption and shift away from relying on exports for growth.
Ting Lu, Nomura’s chief China economist, warned that without meaningful steps to end the economy’s deflation, a yuan revaluation to reduce the trade surplus is not sustainable.
According to Lu’s calculations, the trade-weighted yuan’s value against the dollar as well as against a basket of currencies rose 3% from 2021 to 2025, when China’s exports surged 44.8%.
“If growth slows and deflation worsens, the market may take a bearish view on the renminbi again, potentially leading to weakness against the US dollar and its basket,” Lu said.
The offshore yuan rose more than 3% year-to-date on Monday to 7.0496 to the dollar, its highest level since October last year, according to LSEG data.
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