The National Bureau of Statistics (NBS) has released the trade and economic data for October 2024, reflecting a mixed economic outlook. Retail sales surged 4.8 percent, the highest since February 2024, buoyed by holiday spending and Singles’ Day promotions. However, industrial output growth slowed to 5.3 percent, missing expectations, and the property sector remains sluggish despite recent policy measures.
Amid this backdrop, economists highlight the challenges of sustaining growth, particularly with rising global uncertainties. The return of Donald Trump as President-elect of the United States, who has threatened significant tariffs on Chinese imports, poses a potential headwind for China’s trade-dependent sectors.
In response, analysts anticipate further stimulus measures, including fiscal expansion and interest rate cuts, to counteract cyclical pressures.
In October 2024, China’s industrial value added (IVA) grew by 5.3 percent YoY, a slight slowdown from the 5.4 percent increase recorded in September. This marks a modest deceleration, reflecting a mixed performance across key industries and economic segments.
The IVA of manufacturing rose by 5.4 percent YoY, matching the growth rate of the power, heat, gas, and water production and supply sector. The mining industry expanded at a slower pace of 4.6 percent YoY. However, the equipment manufacturing sector and high-tech manufacturing outpaced overall growth, increasing by 6.6 percent and 9.4 percent YoY, respectively, highlighting the resilience of advanced manufacturing sectors.
Notable product categories recorded impressive output growth in October:
- New energy vehicles: +48.6%
- Industrial robots: +33.4%
- Integrated circuits: +11.8%
From January to October, the IVA grew by 5.8 percent YoY, consistent with the year-to-date growth rate as of September. This stability underscores the gradual recovery of industrial activity despite ongoing external and domestic challenges.
Breaking down growth by ownership, private enterprises outperformed others with a 4.8 percent YoY increase, while state-owned enterprises grew by 3.8 percent. Enterprises with foreign investment or investment from Hong Kong, Macao, and Taiwan reported a more modest growth of 2.9 percent.
On the demand side, sentiment improved in October, with the manufacturing Purchasing Managers’ Index (PMI) rising to 50.1 percent, up by 0.3 percentage points from September. The business activity expectations index also climbed to 54.0 percent, signaling stronger confidence in future production and operations.
As policymakers aim to balance recovery and structural adjustments, the strong performance of high-tech and green industries offers hope for sustained momentum in China’s industrial sector.
Services sector expands in October
In October, China’s services production index grew by 6.3 percent YoY, accelerating by 1.2 percentage points compared to September. The robust growth highlights a significant recovery in the sector, with modern service industries leading the way.
Several service industries recorded the following growth rates in October:
- Financial services: +10.2%
- Information transmission, software, and IT services: +9.5%
- Leasing and business services: +8.8%
From January to October, the services production index increased by 5.0 percent YoY, up by 0.1 percentage points from the year-to-date growth reported in September. During the first nine months of the year, revenue from service enterprises above designated size rose by 7.2 percent YoY, reflecting continued expansion in the sector.
The business sentiment also improved, as indicated by the services business activity index, which rose to 50.1 percent in October, up by 0.2 percentage points from September. Furthermore, the business activity expectations index climbed to 56.2 percent, a 1.6 percentage point increase, signaling strong optimism for future growth.
Key industries such as rail, water, and air transportation, postal services, capital market services, and ecological protection and public facility management demonstrated particularly high levels of activity, with business activity indexes exceeding 55.0 percent.