November economic performance resilient

China's economy maintained steady momentum in November amid mounting external uncertainties and persistent pressures from still-weak domestic demand, official data showed on Monday, reinforcing expectations that policymakers will step up countercyclical support to stabilize growth and lay the groundwork for a strong start next year.

Analysts said November data showed that while supply-side activity and high-tech industries remained resilient, the imbalance between strong production and subdued demand has become more pronounced, highlighting the need for more proactive macroeconomic policies to sustain the recovery.

With the annual Central Economic Work Conference setting out priorities for the year ahead, they expect policymakers to see the frontloading of a more proactive macro policy aimed at boosting domestic demand, unleashing consumption potential and increasing effective investment to hedge against the impact of potential slowing external demand.

The National Bureau of Statistics said China's value-added industrial output rose 4.8 percent year-on-year in November versus a 4.9 percent rise in October.

Retail sales, a key measure of consumer spending, grew by 1.3 percent year-on-year in November after a 2.9 percent rise in October.

"The year-on-year growth of industrial profit weakened due to slow domestic demand recovery, insufficient manufacturing momentum and a slowdown in utilities output," said Wen Bin, chief economist at China Minsheng Bank.

"Consumption also came under pressure in November, partly due to a higher base from more generous trade-in subsidies a year earlier and continued weakness in household balance sheets linked to the housing downturn."

Meanwhile, Wen said some cumulative indicators suggest the economy is still running above last year's pace.

"With industrial output and services activity growing faster in the first 11 months than in 2024 as a whole, growth remains around the 5 percent level, supporting the Central Economic Work Conference's assessment that major economic and social development targets will be met this year," he added.

Wen's views were echoed by Louise Loo, head of Asia economics at British think tank Oxford Economics.

"The significant amassing of fiscal deposits within the banking system in recent months implies that authorities are likely to keep policy settings accommodative in the new year, when political and policy incentives to start the 15th Five-Year Plan (2026-30) on a strong note are high," Loo said, adding that her team expects sequential growth will pick up meaningfully next year, supported by recovering fixed capital formation.

Looking ahead, Loo said fiscal stimulus measures will follow Beijing's definition of "rebalancing" toward advanced manufacturing.