China's economy is losing momentum at the end of the year. November data show a slowdown, with everything below economists' expectations.
Retail sales, a key gauge of consumption, rose 1.3% year-on-year, the weakest increase since December 2022.
The picture is no better in terms of investment: over the first 11 months of the year, fixed-asset investment fell 2.6% compared with the same period last year.
This decline should, however, be seen in context. According to Goldman Sachs, 60% of the drop stems from statistical revisions. The remaining 40% reflects the crisis in real estate and so-called anti-involution measures taken by the government to combat overcapacity in certain sectors.
The pullback is starting to worry Chinese authorities, which for the first time last week pledged to halt the decline in investment. "We will promote the stabilization and recovery of investment," read a statement released after a two-day economic meeting chaired by Xi Jinping.
For years, the Chinese model has relied on investment, fueled by exports. However, for several years now, the Communist Party has sought to shift towards a model in which growth is driven more by domestic demand.
A pivot desired, announced and awaited by investors - although one that has struggled to truly take hold.
Consumers still face a negative wealth effect from falling property prices, which continues to weigh on sentiment.
And although the property crisis has been an issue for several years, the market has yet to stabilize: prices just keep falling.
 
Source: ING
The latest data therefore reinforces the idea that additional fiscal support from the Chinese government in early 2026 is necessary. As ING's team sums up: "Much remains to be done for domestic demand to drive growth in 2026 and beyond."
