November’s economic data from the Chinese mainland offers pivotal insights into the nation’s economic performance and provides forecasts for the upcoming year. The timing of this data release aligns with the annual Central Economic Work Conference, amplifying its significance for global analysts and investors.
Positive Trends in Financial Institutions
In the first eleven months, total savings deposits in financial institutions grew by 6.9 percent, a decrease from last year’s 12.4 percent. Household deposits increased by 10.4 percent, while non-financial company deposits declined by 2.4 percent. The seven-day weighted-average interest rate dropped from 2.27 percent to 1.78 percent, indicating that relaxed monetary policies are effectively channeling funds into the real economy.
Mixed Signals in Monetary Supply
While the M2 money supply (including cash in circulation, current deposits, and time deposits) increased by 7.1 percent compared to last year’s 10 percent, M0 (cash in circulation) grew by 12.7 percent, up from 10.4 percent. This divergence suggests a weaker credit-generating ability than expected, supported by loan data showing accumulated loan growth slowing to 7.7 percent from 10.8 percent, and a decline in loans’ share of total social financing from 62.8 percent to 55.1 percent.
Investment Growth in Key Sectors
Accumulated fixed investments rose by 3.3 percent, up from last year’s 2.9 percent, despite being down from 4.2 percent at the year’s start. The primary sector saw investment growth of 2.4 percent, recovering from a previous slight decline, indicating stronger supply and stable food price expectations. The secondary sector experienced robust investment growth of 12.0 percent, surpassing last year’s 9 percent. Notably, private investment in manufacturing grew by 11.4 percent, highlighting increased confidence in this area.
Signs of Stabilization in the Property Market
The property market continues to face challenges, with accumulated sales by floor area down by 14.3 percent in November. However, the decline has narrowed compared to previous months, and price indices for new and existing homes have slightly increased. The market is responding positively to significant policy changes implemented in the third quarter, suggesting further recovery ahead.
Policy Directions and Future Outlook
These economic indicators provide clarity on policy directions set during the Central Economic Work Conference. The government has called for more accommodating monetary and proactive fiscal policies, aiming to provide the real economy with greater volumes of affordable funds while reducing taxes and fees. Addressing risks in the property sector remains a priority, with promises of further supportive measures such as local government initiatives to reduce inventory.
Looking forward, these initiatives suggest that the Chinese mainland’s economy is poised for continued development and increased vitality in the coming year. Global readers, business professionals, and investors will be watching closely as these policies take effect and shape the economic landscape.
Reference(s):
Opportunities among obstacles borne from China's November data
cgtn.com
