China's Economic Slowdown: A Call for Structural Reform

China's factory output and retail sales witnessed their slowest growth in over a year in October, emphasizing the urgency for economic reform amid a trade war with the U.S. Weak domestic demand challenges China's traditionally export-driven economic strategy, highlighting the need for structural adjustments and new policy directions.

China's economic growth slowed in October to its weakest pace in over a year, intensifying calls for policymakers to revamp the $19 trillion export-driven economy. The manufacturing sector, long reliant on global exports, now confronts barriers from the U.S. trade war and sluggish domestic demand.

Industrial output rose by just 4.9% year-on-year, the lowest since August 2024, falling short of forecasts and raising alarm bells within the National Bureau of Statistics. Retail sales also stumbled, showing a mere 2.9% growth last month, underscoring weakened consumer sentiment despite heavy promotions during China's Singles' Day.

Amidst these challenges, experts, including Fred Neumann of HSBC, stress the necessity for significant economic reforms to address supply-demand imbalances and reduce local government debt. Despite structural challenges, officials are cautious about immediate stimulus, opting instead to prioritize long-term sustainable strategies.

(With inputs from agencies.)