2025-12-15
China's November Retail YoY +1.3% Only
In November 2025, China’s total retail sales of consumer goods reached approximately RMB 4.39 trillion, up about 1.3% year on year. The growth rate came in well below the market’s prior expectation of nearly 3% and declined further from October, remaining near the lowest range since December 2022. Compared with the roughly 3% year-on-year growth recorded in November 2024, the pace has weakened markedly, underscoring the continued softness in the recovery of domestic demand. On a cumulative basis, retail sales grew by about 4% in the January–November period, slower than the near-5% pace seen in the first half of the year, indicating a cooling in consumer confidence and actual spending since the third quarter.
From a structural perspective, urban retail sales in November totaled around RMB 3.8 trillion, growing by about 1% year on year, significantly weaker than the nearly 3% growth recorded in rural areas. This divergence suggests that consumption in first-tier and some second-tier cities remains cautious amid property market adjustments and employment pressures. Merchandise retail sales amounted to roughly RMB 3.8 trillion, also up about 1%, while catering revenue exceeded RMB 600 billion, rising by more than 3%, indicating that service-related consumption continues to show some resilience but is insufficient to fully offset the weakness in goods consumption. Retail sales excluding automobiles reached approximately RMB 3.94 trillion, up about 2.5% year on year, outperforming overall retail growth. This implies that auto-related consumption dragged on headline performance in November, partly due to earlier front-loaded promotions and a higher base.
The key factors weighing on consumption in the current cycle include:
The ongoing adjustment in the property market, with uncertainties surrounding home prices and delivery timelines prompting middle- and high-income households to postpone large durable goods purchases.
Weak employment and income expectations, particularly among younger workers and those engaged in platform-based jobs, constraining discretionary spending.
Tight local government finances, resulting in less intensive offline consumption promotion activities and subsidies than in early 2023–2024, limiting the marginal impact of policy support.
Periodic deflationary pressures, with price declines in some goods dampening nominal retail growth despite relatively stable volumes.
Lower household risk appetite, with a preference for savings and wealth management products, leading to more cautious spending on travel, luxury items, and non-essential goods.
Overall, the year-on-year growth in retail sales remained at a low level in November, highlighting the still-gradual pace of domestic demand recovery and the economy’s relatively high reliance on exports and policy support. In the short term, with the approach of the New Year and Lunar New Year holiday season, retail sales growth may edge up modestly if local governments and e-commerce platforms introduce additional discounts or consumption vouchers. However, after adjusting for seasonal factors, the underlying trend is likely to remain subdued. Over the medium term, whether consumption can recover more meaningfully in the coming six months will hinge on three key factors: further stabilization in the property market and local government debt risks; a gradual improvement in employment conditions and real wage growth, particularly for lower- and middle-income groups; and the introduction of more targeted consumption-supportive policies at the central level, such as trade-in programs for durable goods and subsidies for service consumption. Absent substantial progress on these fronts, overall consumption growth is likely to remain in the low- to mid-single-digit range, making a return to the strong rebound seen in the early post-pandemic period unlikely.
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