China’s economy falters with growth hurt by investment slump

China’s economic activity cooled more than expected at the start of the fourth quarter, with an unprecedented slump in investment and slower growth in industrial output adding to a drag from sluggish consumption.

Industrial production climbed 4.9% last month from a year earlier, according to data released by the National Bureau of Statistics on Friday, down from 6.5% in September. The median forecast of economists in a Bloomberg survey was for an increase of 5.5%.

Fixed-asset investment shrank 1.7% in the first 10 months of the year, a record decline for the period. Capital spending on infrastructure barely increased and growth in manufacturing outlays slowed, while property investment slid further.

Retail sales gained 2.9%, slowing for the fifth straight month in the longest such streak since 2021. The surveyed urban unemployment rate dropped slightly to 5.1%.

“The economy is facing quite a few challenges given the multiple unstable and uncertain factors in the external environment and rather big pressure on economic restructuring within the country,” the NBS said in a statement accompanying the data release. It added that officials would “actively facilitate the implementation” of existing policies, likely suggesting Beijing isn’t yet in a hurry to provide more help for the economy.

The market had a muted reaction to the disappointing data, with the yuan and government bonds trading little changed. The CSI 300 Index of stocks was down 0.7%, after a 1.2% advance on Thursday.

The world’s second-largest economy is losing further momentum at the start of the final quarter after expansion moderated over the previous six months. China is more vulnerable after a surprise contraction in exports that, if sustained, would leave it more exposed to a slowdown in consumer spending at home.

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