China's Economic Slowdown Deepens as November Retail Sales Miss Forecasts

2025-12-15 economy

Beijing, Monday, 15 December 2025.
November data reveals a sharp deceleration, with retail sales growing just 1.3 percent—well below forecasts—while real estate investment plunged nearly 16 percent, highlighting critical weakness in domestic demand.

Consumer Confidence Under Pressure

The latest economic indicators from the National Bureau of Statistics (NBS) paint a concerning picture of consumer sentiment in the world’s second-largest economy. In November 2025, retail sales rose by only 1.3 percent year-over-year, a figure that significantly missed the 2.9 percent median forecast by analysts [1][2]. This marks the slowest pace of growth on record outside of the pandemic era, signaling that household spending remains deeply constrained [2]. The sluggish performance was partly driven by a decline in big-ticket purchases; notably, auto retail sales by volume fell 8.1 percent year-over-year to 2.23 million units [1]. Even the annual Singles’ Day shopping festival failed to provide the anticipated boost, with gross merchandise volume growing 12 percent, a sharp deceleration from the 20 percent growth recorded the previous year [1].

Industrial Divergence: High-Tech vs. Traditional Manufacturing

While consumption faltered, the industrial sector displayed a complex performance characterized by a widening divergence between high-tech growth and broader manufacturing sluggishness. Industrial production increased by 4.8 percent year-over-year in November 2025, missing expectations and representing the weakest growth since August 2024 [1]. However, specific sectors benefitting from state support bucked the trend. The output of new energy vehicles (NEVs) surged 17 percent to 1.84 million units, while industrial robot production jumped 20.6 percent [5][7]. Furthermore, high-tech manufacturing expanded by 8.4 percent, significantly outpacing the general manufacturing growth of 4.6 percent [5][7]. This data underscores the government’s push toward “new quality productive forces,” even as traditional drivers of growth lose momentum [7].

Real Estate Investment Continues Freefall

The property sector remains the primary drag on the Chinese economy, with no immediate signs of a turnaround. In the first 11 months of 2025, investment in real estate development dropped 15.9 percent compared to the same period in the previous year [1]. This collapse in investment contributed to a wider 2.6 percent decline in overall fixed-asset investment from January to November [1][6]. The price signals are equally discouraging; home prices across 70 major cities generally declined in November. specifically, new home prices in tier-1 cities fell 1.2 percent, while resale home prices dropped 5.8 percent year-over-year [1]. Eswar Prasad, a professor of economics at Cornell University, observed that while the government aims to rebalance growth, there appears to be “little sense of urgency” regarding concrete measures to bolster household consumption and stabilize the market [1].

Sources

China economy Retail sales