China’s retail sales growth hits three-year low after tariff faceoff with US

China’s retail sales grew last month at their slowest pace in nearly three years, official data showed on Monday, December 15, underscoring the difficulty leaders face in reviving consumption in the world’s second-largest economy.

Beijing has in recent years sought to rebuild confidence in the domestic economy, which has been weighed down by a prolonged debt crisis in the country’s vast property sector.

Reversing the downturn has become a key priority for policymakers, who have repeatedly pledged to strengthen weak domestic activity even as exports to the rest of the world continue to expand.

Retail sales, a key indicator of consumer spending, rose by 1.3 per cent year on year in November, the National Bureau of Statistics (NBS) said. This marked the weakest pace since December 2022, when stringent zero-COVID measures were lifted.

The figure also fell well short of a Bloomberg forecast of 2.9 per cent and matched October’s reading. Monday’s data “point to broad-based weakness in domestic activity”, wrote Zichun Huang of Capital Economics in a research note.

“Policy support should help drive a partial recovery in the coming months, but this probably won’t prevent China’s growth from remaining weak across 2026 as a whole,” she said.

Despite the slump in spending, China’s economy has been supported by strong exports, which have remained resilient despite this year’s fierce trade war with the United States.