China's Economy Shows Signs of Recovery, But Agent J Isn't Impressed

Mixed Bag of Data Leaves Economists Cautious

So China's industrial output grew at the fastest pace since February 2022 in November. Big whoop. Retail sales growth missed expectations. Surprise surprise. Looks like the world's second largest economy is having a patchy recovery. But hey don't take my word for it. Miao Ouyang Bank of America's Greater China economist said "The data is a mixed bag." Wow what a revelation. Domestic demand is still weak and the government needs to do more to stabilize the economy. No kidding Sherlock.

Industrial Output Beats Expectations Retail Sales Not So Much

According to the country's National Bureau of Statistics China's industrial output grew 6.6% in November from a year earlier. That's higher than the 5.6% expected in a Reuters poll. But hold your applause folks. Retail sales only climbed 10.1% in November from a year ago missing the expected 12.5% spike. Looks like people aren't rushing to the stores like they used to. Maybe they're too busy watching reruns of Men in Black. Can't blame them it's a classic.

Fragile Recovery and Real Estate Woes

China's post Covid recovery is like a delicate flower that's been trampled on. It's falling short of expectations thanks to a real estate crisis debt risks and chronic youth unemployment. The government's policy support measures haven't done much to lift economic sentiment. So now everyone's shouting "Stimulus please!" They're afraid the slowdown will get even worse. But hey at least there are some green shoots. Investments in infrastructure and manufacturing increased retail sales rose and real estate development investment dropped. It's like a rollercoaster ride but without the fun.

Real Estate Blues and Softening Demand

Oh did I mention that China's new home prices fell for the fifth straight month in November? Yeah people are not feeling confident about buying houses. And some of the biggest real estate developers are drowning in debt. Talk about a real estate sector that needs a serious makeover. The recent economic data is not looking too good either. Consumer prices fell producer prices deflated and imports took a nosedive. It's like the economy is playing a game of limbo seeing how low it can go. Spoiler alert: it's pretty low.