What: China’s November retail sales rose just 1.3%, highlighting the limits of government stimulus and the impact of weakening consumer demand.

Why it is important: This slowdown reflects persistent structural weaknesses in China’s economy, echoing recent reports of policy limitations and shifting consumer behaviour.

China’s latest retail sales data reveal a significant deceleration, with growth reaching only 1.3% in November—the slowest pace outside the pandemic period. This underperformance underscores the mounting challenges facing the world’s second-largest economy, as both government stimulus measures and trade-in policies have failed to generate sustained momentum in consumer spending. The contraction in fixed-asset investment and the ongoing property sector downturn further compound the situation, limiting opportunities for retail expansion and new store openings. The fading effect of earlier subsidies and the earlier timing of Singles’ Day promotions have distorted sales patterns, while categories such as home appliances and automobiles experienced their steepest declines in years. Despite policymakers’ pledges to prioritise domestic demand and stabilise growth, the lack of aggressive new measures and persistent external trade tensions continue to weigh on confidence. As China approaches 2026, the retail sector faces a critical test of adaptability amid evolving consumer behavior, policy uncertainty, and international pressures.

IADS Notes: In March 2025, Inside Retail reported on China’s introduction of a ¥300 billion stimulus package and expanded trade-in programs aimed at boosting consumer spending, yet these interventions only temporarily lifted sales in categories such as home appliances and cultural goods (Inside Retail, March 2025; Xinhuanet, May 2025). Despite these efforts, the sector continued to face significant headwinds from a deteriorating property market, rising unemployment, and renewed tariff pressures. By November 2025, Inside Retail highlighted the declining impact of Singles’ Day, reflecting a broader shift in consumer sentiment and spending patterns (Inside Retail, November 2025). Meanwhile, The Diplomat in April 2025 documented how ongoing supply chain restructuring in response to trade tensions forced retailers to adapt rapidly. The government’s strategic pivot toward domestic consumption over technology development, as noted by Inside Retail in March 2025, underscores the recognition of the need for structural change, but the sector’s resilience will be tested as these challenges persist into 2026.

China’s worst retail sales outside Covid add to growth risks