China's November Retail Sales Growth Misses Forecast, Highlighting Deepening Consumption Weakness

China's consumer spending momentum stalled in November, with retail sales expanding by only 2.8% year-on-year, according to official data, well below the 4.5% consensus forecast. The weak result marks a further deterioration in household consumption, a key pillar of economic growth, and follows a subdued October reading. Industrial production growth slowed to 4.2%, missing the projected 5.0%, while fixed asset investment declined by 0.2% month-on-month in November—its first drop since early 2024 and deeper than the anticipated 0.1% contraction. The persistent weakness in core economic indicators reflects ongoing challenges in restoring consumer confidence, despite policy support including targeted interest rate cuts and fiscal stimulus. Persistent deflationary pressures, high youth unemployment, and cautious household balance sheets continue to weigh on spending, particularly in the consumer discretionary sector. The data also underscores structural headwinds in property investment, which declined 11.7% year-on-year, contributing to the broader investment shortfall. Markets reacted swiftly, with the FTSE China A50 Index falling 1.3%, and the iShares China Large-Cap ETF (FXI) down 1.7% in early U.S. trading. The offshore Chinese yuan weakened to 7.31 per dollar, with USDCNY rising to 7.3050, reflecting renewed risk aversion. Energy and materials equities were hit hardest, as lower demand expectations pressured oil and industrial metal prices. The U.S. Energy Select Sector SPDR Fund (XLE) dropped 2.1%, while copper futures traded at a two-month low. The latest figures intensify scrutiny on Beijing's next policy moves. With growth targets under pressure and inflationary risks remaining subdued, policymakers may face growing pressure to introduce more aggressive stimulus measures. The outcome will influence global commodity flows, supply chains, and investor positioning in emerging-market equities.