Well, as we have been discussing, China's economic activity worsened in November with widespread virus outbreaks and restrictions. Joining us now to talk about the numbers and the Karen Bloomberg's Chief Asia Economics correspondent, and we had a miss on industrial production growing just two point two percent we were expecting three and a half and retail sales off by almost six percent, a much sharper decline than expected and
probably not going to get much better, is it? Yes, I think when you see these numbers this morning, Pool, it should come as no surprise really that China is having to pivot away from it's very strict COVID zero strategy. As you mentioned, weakness across the board here, fixed usset investment, industrial output, retail sales all missing analysts estimates. The big
contraction retail sales is a real standard. I mean when you look through the components, it's almost negative right across the board in terms of what people are spending are not spending their money on. We also had numbers out this morning showing that the house house prices continue continue to decline, although the pace of that client slowed a little bit in November from October. But you have to say, when you take it all together, these numbers for November
are bad. They captured that the economy was in a whole and just speak to why the authorities having to make the pivot that they are. Yeah, but look at what's happening right now. I mean you can see it very clearly from where you are in Hong Kong on the mainland. You've got these COVID cases spiking in Beijing. There's the risk it's going to spread in in into some industrial centers, which would even dampen industrial output. I
can only imagine the negative impact on consumer sentiment. And we're five weeks out from the Lunar New Year holiday. I mean, this could get a lot worse before it gets better. Well, this seems to be the initially reaction from analysts. Also, they are making the point that those numbers, in those numbers from November are almost ancient history. And I were talking about a holy part tim for the economy, and that is how does it manage the exit waves?
The number one is the public health issue. How how you know, how will we cope, how the hospital's cope, what kind of fatality rate will there be? And in that environment. To your point, people are saying, that's hardly going to be sort of unleashing fertile ground for unleashing animal spirits among consumers. There's a chance of ongoing destructions, say to a factory production, because just like every other economy,
workers gets sick, they can't turn up. Throw in that disruptions to your services sector as well, university, school, shopping shops and everything else. So the point is the coming months are going to be choppy until we see how China can navigate this. We do. There's an unusual factor with channing that we're going to this massive annual holiday Lunar New yor holiday coming up in the middle of January.
That's obviously going to be huge test for the authorities in terms of are they really now going to live with this disease, have they adjusted or will they roll back and try and put on some restrictions on travel and the like. So I think the near term picture looking pretty choppy. Most people saying hang on until maybe second quarter to get a clearer handle on where the economy is going. Yeah, this whole environment, it seems right
for policy support, what are we anticipating him? Well, we did have the cential Bank in the market this morning. They actually put extra money into the system. That's being interpreted really as just trying to calm down a nervous credit market, and you know's ongoing turmoil and challenge credit markets linked to the property sector. So they've tipped in some extra money there to calm down those borrowing costso spreads. But they did not lower their interest rate this morning,
the Central Bank. And that's because there's a view interest rates are already low enough. It's not it's not lower interest rates that China needs right now. It's probably you know, a much more a much more far reaching vaccination campaign. I think that the authorities are preaching every day about the pressures on the economy, so we will see ongoing
public support. There will be more public money coming. The survey jobless rate this morning isn't the perfect read of China's labor market, but it ticked up, and you have to look at the direction, so you can be sure the authorities will respond to that. So I would say keep it on the physical side of it. We do. We do have a very important meeting of economic confessions in Beijing this week, and they're expected to set out
the economic program for the year ahead. We won't get a read out this week, but you can be sure supporting the economy would be a big part of that. And thank you so much. It's always a pleasure. Uh. And occurring there is Bloomberg's chief Asia economics correspondent joining us from Hong Kong, unpacking the weak economic data that we had both for industrial production and retail sales. This is Bloomberg