International News 16 December 2025
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China’s Economic Momentum Weakens as Factory Output and Retail Sales Slow
China’s economic performance softened further in November 2025, with both factory output and retail sales recording their weakest growth in more than a year, underscoring mounting challenges for policymakers managing the world’s second-largest US$19 trillion economy. Official data from the National Bureau of Statistics showed industrial production grew 4.8% year-on-year, down from 4.9% in October and below market expectations of 5.0%, marking the slowest pace since August 2024. Meanwhile, retail sales rose just 1.3%, sharply decelerating from 2.9% in October and hitting the lowest level since December 2022, when China was emerging from its zero-COVID policy. Fading consumer trade-in subsidies, a prolonged property downturn, and heavy industrial investment that risks deepening deflationary pressures have left Beijing increasingly reliant on exports to sustain growth. However, that strategy is under strain amid growing global resistance to China’s near US$1 trillion trade surplus and rising import barriers abroad. Economists warn that policy options are narrowing, with the IMF urging faster structural reforms and stronger action to resolve the property crisis, where roughly 70% of household wealth is tied to real estate. Additional headwinds include falling home prices, weaker property investment, and an 8.5% annual drop in auto sales, the steepest decline in ten months, highlighting persistent fragility in domestic demand.
China’s New Home Prices Extend Decline, Signaling Prolonged Property Slump
China’s new home prices fell again in November 2025, underscoring the difficulty of reviving demand in the property sector despite repeated government pledges to stabilize the market. Official data from the National Bureau of Statistics showed new home prices declined 0.4% month-on-month, a slightly milder drop than October’s 0.5% contraction. On a yearly basis, however, pressure intensified, with prices falling 2.4% year-on-year, deeper than the 2.2% decline recorded a month earlier. The downturn in China’s property market has persisted since mid-2021, driven by weak sales, liquidity stress among developers, and falling home values that have weighed on household wealth and consumption. Prices in the secondary market remain soft across all city tiers, with first-tier cities down 5.8% YoY, while second- and third-tier cities fell 5.6% and 5.8%, respectively. Separate data showed property investment and home sales slumped further in the first 11 months of the year, reinforcing concerns that recovery will be slow. Economists surveyed by Reuters expect home prices to keep falling through 2026 before stabilizing in 2027, while the IMF has urged stronger measures, estimating China may need to deploy around 5% of GDP over three years to fully resolve the property crisis.
China’s Vanke Seeks Bond Extension Again After Investor Rejection
China Vanke, one of the country’s largest state-backed property developers, will hold a second bondholder meeting on Thursday, December 18, 2025, to seek approval for extending repayment of a 2 billion yuan (about US$283 million) domestic bond that matured on December 15. According to filings with the National Association of Financial Market Institutional Investors, voting on the proposal—organized by Shanghai Pudong Development Bank—will close on December 22 at 02:00 GMT, after investors previously rejected Vanke’s initial plan to delay repayment by one year. The rejection has pushed Vanke into a five-working-day grace period, during which interest will continue to accrue on the unpaid principal and interest at the coupon rate plus 5 basis points. The setback heightens default risk and revives concerns over China’s prolonged property crisis, even for developers with state backing. Beyond the mid-December bond, Vanke is also seeking extensions on another 3.7 billion yuan yuan-denominated bond due on December 28, highlighting mounting liquidity pressure across China’s real estate sector amid weak sales, falling home prices, and years of developer debt stress.