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China’s Economy Slows as Factory Output and Retail Sales Hit Yearly Lows
China’s factory output and retail sales slowed sharply in October, highlighting weak domestic demand and trade war pressures. Policymakers face urgent calls for structural reforms to revive growth.
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by Muhammad Hashir
2025-11-14
China’s Economy Slows as Factory Output and Retail Sales Hit Yearly Lows

China’s industrial output and retail sales growth slowed sharply in October, raising concerns about the health of the world’s second-largest economy amid ongoing trade tensions with the U.S. and weak domestic demand.

Industrial output grew 4.9% year-on-year, the slowest pace since August 2024, down from 6.5% in September, missing forecasts of 5.5%, according to National Bureau of Statistics (NBS) data. Meanwhile, retail sales increased only 2.9%, the lowest growth since August last year, slightly above forecasts of 2.8% but below previous months.

Economists warn that the slowdown underscores the economy’s reliance on exports and infrastructure-driven growth, leaving limited room for maneuver amid declining consumer confidence and investment. Fred Neumann, chief Asia economist at HSBC, said, “The strong lift from exports that supported growth in recent quarters will be hard to sustain…without significant further stimulus, it will be hard to reverse recent slowing in both investment and consumption.”

Domestic consumption also faltered, with car sales snapping an eight-month growth streak and Singles’ Day shopping giving only a temporary boost. Fixed asset investment fell 1.7% year-on-year in the first 10 months, deepening concerns about the slowdown.

Policymakers have acknowledged the need for structural reform, including increasing household consumption and addressing local government debt, but political risks and trade war pressures complicate decisive action. Analysts note that state-owned enterprises are currently propping up headline growth figures, while private investment remains subdued.

“Structural issues are dragging down growth,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “China only needs 4.5%-4.6% growth for the fourth quarter to meet the 5% annual target, so the willingness to introduce more stimulus is limited.”

With trade tensions ongoing and domestic demand failing to pick up, China faces mounting pressure to adopt new policy measures to sustain its $19 trillion economy, especially as global uncertainties loom.
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