China Bracing For Its Longest Consumption Slowdown Since Post-COVID Rebound

China is bracing for its longest period of consumption slowdown since the post-Covid rebound, with data expected to show a 5th straight month of weakening retail sales. 

Despite government vows to lift domestic spending, economic indicators point to a persistent cooling in household demand, revealing the challenges Beijing faces in sustaining growth momentum.

Retail Sales Growth Slows to 2.8% Amid Weak Domestic Demand

Official figures due on November 15, 2025, are expected to show retail sales rising 2.8% year-on-year in October, as per the Bloomberg Survey, the weakest pace in over a year and the fifth consecutive month of deceleration. 

This marks the longest such slowdown since 2021. A part of the weakness to a higher base last year, and one fewer working day in October 2025. However, underlying momentum remains soft as household confidence continues to lag.

Economic Indicators Signal Broader Cooling

Alongside retail data, industrial production is projected to have grown 5.5% in October, down from 6.5% in September. Fixed-asset investment may have contracted 0.8% in the first 10 months of 2025, deepening from 0.5% in the previous period. 

Property investment continues to face double-digit declines, signalling prolonged distress in the real estate sector. Meanwhile, exports fell for the first time in eight months, underscoring weak global demand.

Read More: China’s Car Sales Stumble After Eight Months of Growth: EV Sales Also Saw a Drop!

Policy Support Faces Structural Limits

Beijing’s measures to revive consumption (such as targeted subsidies for specific goods) have yet to translate into stronger household purchasing power. Broader structural reforms to raise income and reduce savings dependence remain limited. 

The government has recently announced a 1 trillion yuan (US$141 billion) stimulus to support local finances and investment, though its impact may take time to materialise.

Conclusion

China’s economic landscape remains uneven, with consumption slowing even as external demand shows resilience. While policymakers aim for full-year GDP growth of around 5% in 2025, the widening gap between strong exports and weak domestic demand highlights the limits of Beijing’s consumption-driven recovery narrative. Sustained improvement may depend on deeper structural reforms to bolster household incomes and confidence.

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