New official data reveals a significant slowdown in China's consumer spending, with retail sales growing at their most sluggish rate in over a year during October 2025. This underscores the persistent challenges facing the world's second-largest economy as it grapples with weak domestic demand.
Key Economic Indicators Show Widespread Slowdown
According to figures released by the National Bureau of Statistics (NBS) on Friday, retail sales increased by only 2.9 percent compared to the same period last year. This figure is slightly lower than the three percent growth recorded in September and marks the fifth consecutive month of deceleration since a peak of 6.4 percent in May.
This 2.9 percent rise represents the slowest pace of growth since August of the previous year, pointing to a deepening consumer malaise. The data arrives as Chinese leaders target an overall growth rate of five percent for 2025, a goal economists still believe is attainable despite the evident slowdown in the latter half of the year.
Broader Economic Challenges and Property Sector Woes
The spending slump is not happening in isolation. Official data also showed that industrial production rose 4.9 percent year-on-year in October, falling short of Bloomberg's forecast of 5.5 percent and also hitting its slowest increase since August last year.
Economists point to weaker external demand as a key drag, with export values and industrial sales for export showing significant weakening. The nation's massive real estate sector, a primary store of wealth for Chinese households, continues to be a major cloud over the economic outlook. Data confirmed that prices for new residential properties fell year-on-year in October in 61 out of 70 major cities surveyed.
Furthermore, fixed-asset investment for the January-October period was down 1.7 percent year-on-year, after having slipped into negative territory in September.
Official Response and Economic Outlook
Fu Linghui, chief economist at the NBS, acknowledged the difficulties at a news conference, stating, "External instability and uncertainty factors remain numerous, domestic structural adjustment pressures are significant, and the stable operation of the economy faces many challenges."
The Communist Party recently held a gathering focused on economic planning, where leaders emphasized the need to "vigorously boost consumption." This aligns with the arguments of many economists who assert that China must transition to a growth model driven more by domestic consumption than by its traditional reliance on infrastructure investment and exports.
However, the outlook remains cautious. Moody's Ratings warned in a recent report that China's "domestic demand may be slow to revive," a sentiment echoed by analysts who expect the economy to remain weak in the coming quarter.
