Chinese retail sales, industrial production beat expectations in Dec

By Ambar Warrick 

Investing.com -- Chinese retail sales fell much lesser than expected in December, while industrial production beat expectations as some facets of the economy benefited from the relaxing of strict anti-COVID policies during the month. 

Retail sales shrank 1.8% in December from the prior year, data from the National Bureau of Statistics showed. The reading beat estimates for a contraction of 8.6%, and was also much better than last month’s drop of 5.9%. 

But retail sales fell 0.3% in 2022, compared to a 12.5% bounce in 2021. 

Early indicators of air and road movement in the country have shown some positive trends among consumers, as the country began relaxing COVID-19 restrictions after three years of on and off lockdowns.

The country also opened its international borders earlier in January, marking a clear pivot away from its zero-COVID policy. This is expected to pave the way for a broader economic recovery later this year. 

Industrial production rose 1.3% in December from the prior year, beating expectations for growth of 0.2%. But growth was lower than last month’s reading of 2.2%. Industrial production grew 3.6% in 2022, much lower than the 9.6% jump seen in 2021. 

Sentiment among major Chinese producers also appeared to have remained steady, as data showed that Chinese fixed asset investment grew 5.1% in December from last year, slightly ahead of expectations of 5.0%, but weaker than November’s reading of 5.3%. 

Separate data showed that China’s economy grew more than expected in the fourth quarter, aided in part by the relaxing of anti-COVID measures in December, as well as a slew of stimulus measures by the government to ramp up growth. 

But while the relaxing of anti-COVID measures is a positive signal for the Chinese economy, the country is also struggling with its worst yet outbreak of the virus, which has cast doubts over the timing of an economic bounce back this year. Still, investors broadly expect the government to increase stimulus spending in the coming months to support the economy.