China released economic data revealing increased retail sales and a slowing decline in house prices, hinting at an economic recovery amid recent stimulus measures. The recovery could benefit European luxury goods and mining stocks as demand from China rises.
advertisementChina’s latest economic data showed signs of recovery in the world’s second-largest economy, largely influenced by a series of recent stimulus measures.
Retail sales growth was remarkable in October, increasing by 4.8% compared to the same month last year, the highest increase in eight months, and industrial production increased by 5.3%, but fell short of the expected 5.5% increase. Furthermore, the decline in house prices has slowed, suggesting that support for the housing market is beginning to have an effect.
Signs of improvement in China’s economy
Recent increases in retail sales and stabilization of the real estate market are encouraging for China’s economic outlook and could signal a resurgence in demand for global exporters. China’s consumer demand has struggled under the weight of deflation and falling imports, while a prolonged housing crisis has hurt investment and consumer confidence. Rising retail sales and the housing market indicate a recovery in domestic consumption and an improving economy.
China’s National Bureau of Statistics (NBS) said, “With the acceleration of the implementation of existing policies and the introduction of a large number of gradual policies in October, the national economy has shown a stable growth trend, and key indicators have markedly recovered and become positive. “We also found that there were other factors.” Accumulated. “
The National Bureau of Statistics (NBS) announced over the weekend that China’s consumer price index (CPI) rose at an annual rate of 0.3% in October, down slightly from September’s 0.4% rise.
On the other hand, the producer price index (PPI) decreased by 2.9% from the previous year, indicating worsening deflation in the manufacturing industry. Analysts suggested that the Golden National Week may have impacted these year-over-year measures, masking the effects of recent stimulus. Furthermore, the core inflation rate, which excludes volatile items such as food and energy, rose to 0.2% from 0.1% in September.
China’s stock market briefly rebounded on Friday in response to the data, with China’s A50 index up 0.7% and the Hang Seng index up 0.8% after the data was released, but both indexes have since pared their gains. The Chinese yuan rose slightly against the US dollar from its lowest level in about four months.
Despite the positive impact of economic stimulus, external pressures continue, with Donald Trump recently vowing to impose tariffs of 60% to 100% on imports from China, adding to the uncertainty. It’s increasing.
“It should be recognized that the external environment is becoming increasingly complex and severe, domestic effective demand remains weak, and the foundations for continued economic recovery need to be strengthened,” the NBS warned.
“President Trump’s tariff policies could pose further challenges to China’s exports, further exacerbating production cuts and straining the economic recovery,” Pepperstone research strategist Dilin Wu said in an email. Ta. “The future of the renminbi is likely to depend more on China’s policy response to the Trump administration than on market sentiment or capital flows,” he added.
Impact on European luxury goods and mining sectors
The health of the Chinese economy, particularly consumer spending and the real estate market, is having a major impact on European sectors such as luxury goods and mining.
LVMH, for example, has seen its share price fall since October due to weak earnings and the growing threat of U.S. tariffs, erasing gains made in September when China’s stimulus package was first announced. European mining stocks were also hit by falling metals prices due to a strong dollar and concerns about Chinese demand.
Luxury brands and mining companies could find support amid recent downturns as China’s economic recovery shows potential signs of resilience. As the stimulus effects continue to take hold, Chinese consumer demand and stability in the real estate market could provide a much-needed boost to these European sectors.
