The Chinese economy is going through a difficult time due to the spread of the novel coronavirus infection (COVID-19). Meanwhile, China faces serious challenges from soaring energy prices. Coal and natural gas prices have soared over the past few months. As a result, the government has demanded that the private sector be restricted from working during peak hours.

However, according to data released by the National Bureau of Statistics, the country’s economy is in relatively good shape. Since October, retail sales in China have increased by 4.9%. This is higher than the average of 3.5%. It was also relatively worse than the previous 4.4%. Meanwhile, according to data, industrial production increased by 3.5% in October. This is better than the average of 3.0% and the previous 3.1%. Sentiment in the Chinese real estate market is being shaken by a deepening debt crisis as real estate giants China Evergrande and Kaisa Group face default. “We expect policymakers to take more easing measures to prevent growth from falling too much,” said Oxford’s Kuijs, adding that weaker demand is driving the broader industry slowdown rather than just supply constraints. Weakening demand is causing not only supply constraints, but also a broader industry slowdown, he added.

Policy sources and analysts told Reuters that China’s central bank will be cautious about easing monetary policy to stimulate the economy as slowing economic growth and rising factory inflation fuel fears of stagflation. NBS spokeswoman Fu Linghui said at a briefing in Beijing on Monday that signs of stagflation are caused by short-term factors such as high global commodity prices. Capital investment continued to slow, according to 4,444 NBS data, up 6.1% in the first 10 months compared to the same period a year ago, up from a 6.2% increase in Reuters and a 7.3% increase in January-September.

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