China’s Economic Gloom Deepens as Property Slump and Investment Decline Intensify

China’s economy showed renewed signs of weakness in October, weighed down by a deepening housing crisis and falling investment. Data released by the National Bureau of Statistics on Friday revealed that fixed-asset investment, which includes spending on real estate, factories, and infrastructure, contracted 1.7% in the first ten months of the year. The figure marks a sharper decline from the 0.5% drop recorded between January and September and represents the worst reading since the early pandemic period in 2020.

The downturn was driven mainly by the ongoing property slump. Real-estate investment shrank 14.7% through October, worsening from the 13.9% fall earlier in the year. Despite repeated government measures to stabilize the market, buyer confidence remains weak, and developers continue to face funding shortages. Official data also showed that new home prices fell 0.5% month-on-month, the steepest drop in a year, while prices were 2.2% lower compared to the same period last year.

Industrial production, another key growth indicator, rose 4.9% in October from a year earlier, slowing from 6.5% in September and missing expectations for a stronger rebound. Analysts attribute the decline partly to a week-long national holiday that closed many factories and disrupted supply chains. Manufacturing investment edged up 2.7%, while spending on utilities such as power and water increased 12.5%, reflecting continued state-backed support for infrastructure projects.

Consumer activity also remained soft. Retail sales grew 2.9% year-on-year in October, slightly better than forecasts but still weaker than September’s 3% growth. Economists note that household spending has been under pressure due to subdued income growth and cautious sentiment, even as the urban unemployment rate eased marginally to 5.1% from 5.2% a month earlier.

On the external front, China’s exports unexpectedly contracted for the first time in nearly two years amid rising global trade tensions. Although the recent understanding between U.S. President Donald Trump and Chinese leader Xi Jinping to pause tariff increases offered short-term relief, economists warn that global demand remains uncertain. Consumer prices rose 0.2% in October, the first positive reading in several months, while core inflation, which excludes food and energy, increased 1.2%, signaling mild domestic recovery.

Overall, the latest figures confirm that China’s economic recovery remains fragile. Economists expect full-year growth to hover around 5%, but momentum has slowed across most sectors. Experts believe Beijing may hold off on major stimulus until early 2026, when fiscal policy is expected to become more supportive. In the third quarter, China’s economy expanded 4.8%, down from 5.2% in the previous quarter, reinforcing concerns that the world’s second-largest economy faces persistent headwinds from property weakness, declining investment, and subdued consumer confidence.