China's Strategic Shift: Balancing Industrial Growth and Consumer Demand

China faces challenges in boosting consumer demand as industrial output grows slightly. Retail sales remain weak, prompting calls for more stimulus. U.S. trade tensions are expected to strain the economy further. Policymakers prioritize economic stability and plan for future growth by stimulating consumption and rebalance strategies.

China's industrial output saw a marginal increase in November, overshadowed by disappointing retail sales figures. This economic dichotomy has fueled calls for Beijing to prioritize consumer-focused stimulus, a necessity given the looming threat of heightened U.S. trade tariffs during Trump's second presidential term.

The latest data highlights the challenges facing China's leaders in achieving a robust economic recovery by 2025. With consumer demand sluggish, U.S. President-elect Donald Trump's promise of tariffs exceeding 60% could pressure Beijing to speed up its economic rebalancing efforts, shifting from a model heavily reliant on fixed-asset investment and exports to one driven by consumption.

The National Bureau of Statistics reported a 5.4% year-on-year growth in industrial output, surpassing October's 5.3%. However, retail sales grew at just 3.0%, falling short of October's 4.8%. Despite policy pledges to stimulate growth, analysts warn that sustained economic improvement requires overcoming deeply rooted issues like the ongoing property crisis.

(With inputs from agencies.)