China Consumption Monthly Roundup | December 2023 Chartbook

21 December 2023 / Report

Our Monthly Consumption Roundup tracks near-term consumption trends and underlying key drivers for China. Learn more about the key highlights for November.

Trusted Insights for What’s Ahead^TM

Retail sales continued to accelerate in November (10.1% y-o-y vs 7.6% in October). However, similar to last month, this was driven by a very low base last year: growth dropped to -5.9% y-o-y in November 2022. Despite favorable headline figures, the growth momentum in consumption is actually moderating.
Looking at big-ticket spending, auto sales continued to post strong growth, benefiting from ongoing policy support and auto makers’ sales promotions. Looking ahead, auto sales could potentially reach a record high this year.
Residential property sales and investment remained in deep contractionary territory. This week, authorities issued more measures to support sales, including lowering the minimum downpayment ratio in Beijing and Shanghai. We expect the authorities to roll out more (albeit targeted) property stimulus measures in the coming months to try and stabilize the sector. Policy support rolled out so far across the country has had only short-lived, marginal effects on sales.
Looking ahead, Q4 headline consumption growth figures will likely look deceptively strong thanks to the low base of comparison of last year. However, the ongoing property downturn and weak hiring intentions will continue to weigh on households’ willingness to spend. Going into 2024, pandemic-related volatility in consumption growth data will fade, which means consumption growth will depend largely on improvements (real or expected) in income increases and labor market conditions and a noticeable recovery in consumer confidence.