• China's factory output increased by only 4.9% in October, the lowest since August 2024.
• Retail sales expanded by 2.9%, marking their weakest growth pace since September 2024.
• The reliance on exports amid U.S. tariffs exacerbates economic challenges for China.
• Policymakers face pressure to implement significant economic reforms to boost consumption.
• The property sector continues to show signs of distress, with home prices dropping sharply.

China's economy is facing significant headwinds as its factory output and retail sales reported their weakest growth rates in over a year. In October, factory output grew by only 4.9 percent, missing the expected 5.5 percent increase, while retail sales expanded by just 2.9 percent, both the lowest figures recorded since August 2024, according to The Jakarta Post, Reuters, and Channel News Asia.

Policymakers are under pressure to stimulate the world’s second-largest economy, which is heavily dependent on exports amid rising U.S. tariffs that hinder profit margins. Even with an economy of such scale, the options available—boosting industrial output or enhancing public spending—are becoming increasingly strained. The economic performance indicators have prompted urgent calls for reforms to address deep-rooted supply and demand imbalances, according to The Jakarta Post, Reuters, and Channel News Asia.

As warned by economists, the resilience provided by exports in previous months is projected to diminish over the coming year, particularly without substantial stimuli to invigorate domestic demand. Fred Neumann, chief Asia economist at HSBC, stated, “The strong lift from exports that supported growth in recent quarters will be hard to sustain,” signifying a shift that puts more weight on internal market health. Investment trends are also unsettling, with fixed asset investments declining by 1.7 percent in the first ten months of the year compared to the previous period, according to The Jakarta Post, Reuters, and Channel News Asia.

The ongoing slowdown in the property sector, crucial for household wealth, continues to show no signs of recovery, with new home prices decreasing at their fastest rate in a year. Such distress within a vital industry underscores the urgent need for robust economic reforms to enhance household consumption, as acknowledged by various analysts and government meetings. The ruling Communist Party of China had recently outlined ambitions to significantly boost this consumption's share of GDP in the next five years, yet questions remain on the implementation of effective measures, according to The Jakarta Post, Reuters, and Channel News Asia.