Beijing: The world's second-largest economy appears to be losing steam as it battles with lengthy COVID-19 limitations and a real estate crisis, as seen by China's manufacturing production growing more slowly than anticipated and surprisingly falling retail sales in October.

A quarter of the economy is made up of the property investment sector, which decreased at its highest rate in 32 months.

The zero-COVID policy, a downturn in the housing market, and the possibility of a global recession are some of the challenges facing China's economy. Market confidence has been supported by recent initiatives to relax certain COVID restrictions and financially boost the real estate market, but economists anticipate Beijing's tight COVID policy will continue to have a negative impact on economic growth.

The numbers released on Tuesday were the most recent to indicate a faltering economy, following reports that exports unexpectedly shrank and new bank lending fell more than anticipated. Recent figures on inflation also indicated a decline in domestic demand.

Goldman Sachs analysts said in a report that "October activity growth widely deteriorated and underperformed market expectations, suggesting to a bad start to Q4 as a worsening COVID scenario, protracted real estate slowdown, and weaker export growth more than offset continuing policy assistance."

Data from the National Bureau of Statistics (NBS) showed on Tuesday that industrial production increased 5.0% in October compared to a year earlier, below forecasts for a 5.2% gain in a Reuters poll and falling from the 6.3% growth observed in September.

The last time retail sales, a key indicator of consumption, declined was in May, when Shanghai was placed on lockdown. Sales decreased by 0.5%, falling short of forecasts for a 1.0% increase and down from a 2.5% increase in September.

A week long National Day holiday had minimal impact on consumer spending in October, a month that is usually favorable for domestic travel.
In October, COVID infections spread across the nation, impacting industries that provide services that are vulnerable to a pandemic. According to NBS statistics, China's catering sales fell by an alarming 8.1% in October, compared to a 1.7% decline in September. The near-term prognosis is dismal, with exports decreasing, the property industry persisting in a slump, and the zero-COVID policy likely to remain in place longer than many hope.

Some calculations based on NBS data show that property investment decreased 16.0% year-over-year in October, which is the largest decline since January-February 2020. In September, it fell 12.1%.

China's property sector has slowed sharply as the government has sought to restrict excessive borrowing. Property sales measured by floor area dropped 23.2% year-year in October, falling for a 15th straight month. A plan to shore up liquidity outlined by Chinese regulators on Sunday sent Chinese property stocks and bonds soaring.

China's finance authority announced in a notice issued on Monday that it will provide real estate developers access to some pre-sale housing funds. Sluggish consumption and faltering property investment remain dawdlers, due to still-weak expectations on household income and macro growth. Fixed asset investment increased by 5.8% in the first ten months of the year, compared to forecasts for a 5.9% increase.

Employer hiring remained low as businesses were more cautious about their finances. According to a poll of economists, the economy will expand by 3.2% in 2022.

Employee hiring remained low as businesses were more cautious about their finances. In October, the 5.5% unemployment rate based on data from national surveys remained constant from September. 17.9% of youth were unemployed, which is the same rate as in September.

According to economists, the nation is on course to fall short of its goal of 5.5% annual growth. According to a survey of economists, the GDP will expand by 3.2% in 2022.