BEIJING, China: China's economic momentum faded sharply in November, underscoring mounting concerns that the country is running out of easy fixes and needs deeper structural reforms to sustain growth beyond next year.

Factory output growth slowed to a 15-month low, while retail sales delivered their weakest showing since China abruptly dismantled its strict "zero-COVID" regime in late 2022, data from the National Bureau of Statistics (NBS) on December 15 showed. The figures point to fragile domestic demand just as policymakers prepare for the next phase of economic planning.

Industrial output grew 4.8 percent year-on-year, easing from 4.9 percent in October and missing a Reuters poll forecast of 5.0 percent. It was the slowest pace since August 2024. Retail sales rose just 1.3 percent, down from 2.9 percent the previous month and well below expectations for a 2.8 percent gain.

"Strong exports limited the need to turbocharge domestic demand this year, and the trade-in subsidies have started to run out," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

"I think policymakers have turned their attention to 2026, since the around 5 percent growth target seems within reach for this year, so there's little additional motivation for further stimulus."

With consumer trade-in subsidies losing steam, a prolonged property downturn sapping household wealth and investment, and industrial overcapacity raising deflation risks, Beijing has leaned heavily on exports to prop up growth. But that strategy is becoming harder to sustain as global trading partners push back against China's roughly US$1 trillion trade surplus.

Chinese equities weakened after the data release, weighed down further by renewed anxiety in the property sector as developer China Vanke raced to avert a debt default.

Many economists argue that China has reached a point at which additional stimulus alone would yield diminishing returns. The International Monetary Fund last week urged Beijing to accelerate structural reforms and tackle the property crisis, noting that around 70 percent of household wealth is tied up in real estate.

Fixing property-sector strains within three years would cost about five percent of GDP, the IMF estimates.

More efforts are needed to shore up household confidence, Fu Linghui, a spokesperson for China's customs administration, said at a press conference following the data release.

New home prices continued to fall in November. Fu said a 2.6 percent decline in fixed-asset investment during January–November was primarily driven by a 15.9 percent slump in property investment over the same period, as developers struggle to sell apartments even at discounted prices.

Vanke, once one of China's largest property developers, plans to convene a second bondholder meeting this week after investors rejected a proposal by a state-backed lender to delay repayments by a year. The property sector previously accounted for about a quarter of China's GDP.

Other signs of strain emerged in consumer sectors. Annual car sales dropped 8.5 percent, the steepest decline in 10 months, dampening hopes for a late-year recovery in an industry that usually benefits from strong year-end demand.

"The economy slowed across the board in November, and weak retail sales were particularly noteworthy," said Zhang Zhiwei, chief economist at Pinpoint Asset Management. "The recent contraction in investment and the continued decline in the property market have been transmitted to consumer confidence."

Even the Singles' Day shopping festival, which stretched over five weeks this year, failed to meaningfully lift spending.

China is expected to maintain a growth target of around five percent next year as it begins a new five-year planning cycle, advisers say, though the IMF and World Bank project more modest outcomes.

At a key economic meeting last week, leaders pledged to keep fiscal policy "proactive" to boost consumption and investment, while acknowledging a "prominent" imbalance between strong supply and weak demand.

Still, the emphasis on investment alongside consumption reinforces concerns that Beijing has yet to pivot away from a production-led growth model fully.

Trade pressures are also intensifying. French President Emmanuel Macron warned of tariffs during a visit to China, calling current trade imbalances "unsustainable." Mexico approved tariff increases of up to 50 percent on imports from China and other Asian countries starting next year.

"November data point to a broad-based weakness in domestic activity, largely due to a pull-back in fiscal spending," said Zichun Huang, China economist at Capital Economics.

"Policy support should help drive a partial recovery in the coming months, but this probably won't avert China's growth from remaining weak across 2026 as a whole."