The latest November economic data from the second largest economy of the world – China, presented a grim picture. The growth in the retail segment was the slowest in November since weakest rate in 2003 and the rate of industrial growth was at the slowest in nearly three years. The reason or this was further softening of domestic demand which underscores that risk the economy is faced with even as it attempts to dodge a bloody trade war with the United States.

In recent quarters, the Chinese economy had been throwing up signs of a slowdown – partly because of a multi-year government campaign to come down on a shadow lending industry which was increasing the strain on the financial markets and on companies which was in turn affecting production and investment.

This year, there has also been a dent in consumer sentiment because of the slowdown in Chinese industries which in turn put the brakes on retail sales. The first to be hit because of this were big-ticket items with the auto segment – especially cars, being the first to report a slowdown back in May.

Data from the National Bureau of Statistics showed a lower than expected (8.8 percent) growth rate for retail sales which increased by 8.1 per cent in November compared to the same month a year ago. This growth rate was the lowest since May 2003. Retail sale noted a 8.6 per cent growth in October.

In November, there was a sharp 10 per cent drop in auto sales calculated year-on-year. This drop was in line of data that had been released by China’s top auto industry association which noted a 14 per cent drop in auto sales in November which is the highest fall in the last seven years.

In addition to the stress on the broader economy, the woes of Chinese economy has been compounded with a trade war with the United States which has put global supply chains at risk, cooled down investments and growth and exports.

In November, the rate growth in industry output also missed analysts’ estimates – coming in at 5.4 per cent but was the same as the rate of growth that was recorded in January-February 2016.

November exports and imports as reported by China over the weekend was also much weaker than expected which underscored a slowdown in global demand and reduction in domestic factory activity because of narrowing profit margins.

Beijing has recently focused on increasing spending even though Chinese economic growth remains at its weakest since the global financial crisis. This strategy by the government has put stress on the banking system as they are being pushed to increase lending. The policymakers in China are also cutting down on taxes to boost businesses and keep off a slump.

Mao Shengyong, spokesman at the statistics bureau, said that the lower than expected November industrial output and growth in retail sales reflected increasing downward pressure on the economy.

(Adapted from VOANews.com)

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