China factory output accelerates as retail sales and investment lag - recap

China's latest economic data highlight an uneven recovery, with industrial production increasing while consumer spending and investment lag. Official figures indicate that industrial output rose by 5.2% year-on-year in December, up from 4.8% in November. However, retail sales grew only 0.9%, down from 1.3%, revealing persistent weakness in household spending. The investment picture is even bleaker, with fixed asset investment falling 3.8% in 2025, marking its first annual contraction since 1998. The property downturn continues, with investment in real estate slumping by 17.2%. Despite this, the labor market remains stable with an unemployment rate of 5.1%. Plans for policy support from the People’s Bank of China are evident, although significant structural challenges persist.