China's economy shows signs of growth.

The yuan has held steady at around 7.24 per dollar as the People's Bank of China (PBOC) chose to hold interest rates steady at its November meeting, following cuts in October and July. Meanwhile, risks of deflation and a slowing economy could prompt the PBOC to start cutting rates or introducing additional policies to boost the economy.

These decisions underscore the PBOC's ongoing assessment of the impact of its previous stimulus measures as China ramps up efforts to counter the economic slowdown and achieve its 2024 growth target of around 5% despite ongoing challenges. Meanwhile, attention has turned to the Hong Kong Investment Summit, where top Chinese officials reaffirmed their commitment to advance capital market reform and expand access to finance for foreign investors.

China's industrial output expanded 5.3% year-on-year in September, after slowing to 5.4% in September. Growth in the manufacturing sector continued to be driven by the computer sector, supported by rapid technological growth. The metal smelting sector also continued to be supported by continued upward momentum in foreign demand. However, some sectors, such as non-metallic mineral production, contracted slightly.

China's retail sales rose 4.8% year-on-year in October, a significant increase from the previous month's 3.2% and above market expectations of 3.8%, driven by a week-long holiday and continued government stimulus measures. The stimulus boosted demand for goods and promotions, leading to higher sales of most products, especially sports equipment and household appliances, which rose by more than 20.5%. Cosmetics also saw a sharp increase in sales, up more than 40.1% year-on-year.

Foreign direct investment (FDI) into China fell 29.8% year-on-year to 693.21 billion yuan (about 96.29 billion U.S. dollars) in the January-October period, down slightly from a 30.4% decline in the first nine months of the year. According to the Ministry of Commerce, about 11.6% of the capital, totaling more than 80.18 billion yuan, was invested in high-tech manufacturing, particularly in semiconductors and data centers, to meet rising overseas demand and future applications. The main countries of foreign direct investment are Germany, Australia and Singapore. However, in October alone, the inflow was only 52.61 billion yuan, down from 60.41 billion yuan in September.

The People's Bank of China (PBoC) decided to keep the policy interest rate unchanged at its November meeting. The one-year prime rate (LPR), the benchmark for most business and household loans, remained at 3.1%, while the five-year lending rate, the benchmark for housing loans, remained at 3.6%. Both rates remain at record lows after the rate cuts in October and July. The latest decision reflects the PBOC's assessment that its ongoing stimulus measures may be comprehensive and sufficient for the domestic economy. Since late September, the government has continued to push the economy out of a slowdown to achieve its growth target of around 5% in 2024, despite prolonged weakness in the property sector, low consumer and business confidence and persistent deflationary risks. Investors expect the central bank to introduce more easing measures in the coming months. After Governor Pan Gongsheng said the central bank could cut the reserve requirement ratio (RRR) by another 25 to 50bps by the end of this year, depending on liquidity conditions in the economy.