China’s Economic Woes Deepen: Housing Crisis & Falling Demand Weigh on Growth Prospects
China’s Economic Outlook Weakens as Housing Slump Deepens and Domestic Demand Falters
By Bob Mason – November 14, 2025
China’s outlook dims fast. The economy suffers as the housing market drops and home buying stays weak. October data show house prices falling, retail sales slowing, and lower industrial output. This news adds worry on the world’s second-biggest economy.
Housing Market Continues to Struggle
October numbers show houses losing value. The House Price Index falls 2.2% over one year, the same drop seen in September and a bit more than some expected. CN Wire reports that 61 out of 70 cities record lower prices. Average home costs drop 0.45% from last month, a stronger fall than the 0.41% seen in September.
House price drops press down on consumer mood and home wealth. These trends put heavy weight on China’s growth plans. Beijing faces hard choices as it tries to stir up spending while problems grow at home.
Mixed Economic Indicators Signal Uneven Recovery
Some data bring mixed signs. The official unemployment rate moves from 5.2% in September down to 5.1% in October. This slight fall may hint at a steadier work scene even as private reports point to ongoing job cuts.
Retail sales grow by 2.9% year-over-year in October, just a bit lower than 3% in September. This slow pace follows a 6.4% rise in May. A high base from last year and fewer workdays may explain some of the drop. The figures tell us that weak domestic buying persists. Industrial output rises 4.9% year-over-year in October, down from 6.5% in September. Fixed asset work falls 1.7% for the year so far, a sharper decline than the 0.5% drop seen before. These numbers back the view that China’s growth faces new limits both at home and abroad.
Market Reaction and Policy Expectations
The mix of news sends careful signals to markets. Hong Kong’s Hang Seng Index slips 0.85% to 26,843 after the report. It hit 26,781 early on before climbing slightly. The Mainland Properties Index shows some strength, rising after an early dip. Some hope rests on more help for houses to come soon.
In forex, the Australian dollar gains from the lower job numbers. The AUD/USD moves from around 0.6537 to a high near 0.6549 and then settles at about 0.6548. This swing points to market hope that China will act in turn.
Trade Tensions and Economic Outlook Ahead
Trade problems also weigh on the economy. A one-year trade pause between President Trump and President Xi cut U.S. tariffs on Chinese goods from 57% to around 47%. That pause has not rebuilt business or consumer trust. Lower external sales squeeze company profits. The squeeze leads firms to cut jobs and weakens local buying further.
Looking ahead, market eyes search for hints that Beijing will add measures to support housing and boost spending. A rise in U.S.-China trade conflicts could darken the view, putting pressure on stocks and slowing the recovery.
Conclusion
China’s path is rough. Falling home prices, weak consumer buying, and slow production all draw a hard picture. Some job figures show small steadiness, yet the overall data stress the need for quick action to support growth and rebuild trust. Investors must keep a close watch as shifts in trade ties and policy now set the future course.
About the author: Bob Mason brings over 28 years of experience in the financial sector, contributing insights on global currencies, commodities, and equities with a focus on European and Asian markets.
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