CHENGDU, CHINA – OCTOBER 18: Foot traffic flows by the Louis Vuitton store at Taikoo Li, a luxurious shopping destination known for its blend of traditional Sichuan architecture and contemporary retail, on October 18, 2025, in Chengdu, China.
Recent economic data indicates that China’s economic slowdown has intensified in October, primarily due to weak consumer demand and a continuing downturn in the real estate sector. The extended holiday period has further disrupted factory operations, contributing to the overall decline in industrial activity.
According to the National Bureau of Statistics, fixed-asset investment, which encompasses real estate investments, recorded a contraction of 1.7% over the first ten months of the year. This marks a significant drop from a 0.5% decline in the January to September timeframe, surpassing analysts’ expectations of a 0.8% decrease. This contraction is the first since 2020, when the pandemic severely impacted the economy.
On a month-to-month basis, fixed-asset investment decreased by 11.4% compared to the same period last year, reflecting the steepest decline since early 2020 during the initial COVID-19 lockdowns. Goldman Sachs attributes this drop to Beijing’s initiatives aimed at curbing industrial excess and addressing the challenges within the housing market.
Investment in the property sector saw a year-over-year decline of 14.7% through October, a slight worsening from the 13.9% drop recorded in the first nine months. Conversely, manufacturing investment posted a modest increase of 2.7%, and spending in the utilities sector—covering electricity, fuel, and water—rose by 12.5%.
Industrial output, however, grew by 4.9% in October, down from a 6.5% increase in September and falling short of the 5.5% growth that analysts had forecasted. Manufacturing activity faced significant contractions, hitting its lowest point in six months as many factories paused operations during the recent holiday from October 1 to October 8.
Retail sales displayed a year-over-year increase of 2.9% in October, outperforming the 2.8% growth anticipated by analysts but marking the fifth consecutive month of decline, resulting in the lowest consumption figures of the year based on data from LSEG.
In terms of employment, the urban unemployment rate showed a slight improvement, trickling down to 5.1% in October from 5.2% in September. While these figures suggest some resilience in the labor market, the overarching economic trends highlight ongoing challenges.
Despite these setbacks, there remains hope that targeted government interventions can stabilize the economy and support recovery in key sectors. The commitment to improving industrial output and consumer confidence could pave the way for gradual economic revitalization in the months ahead.