China reported Friday its industrial output expanded at the fastest pace since February 2022 in November, though retail sales growth missed expectations, pointing to a patchy recovery in the world’s second-largest economy.

Economists are approaching the China data with some caution, given a low base effect. The country was in the final months of its stringent zero-Covid curbs in the last quarter of 2022, which had adversely impacted the economy.

“The data is a mixed bag,” Miao Ouyang, Bank of America’s Greater China economist, told CNBC. “If you look at the whole set of data, it still shows that domestic demand is still on the weak side…and [the government] still definitely needs to do more to stabilize the economy.”

China’s industrial output grew 6.6% in November from a year earlier, according to the country’s National Bureau of Statistics Friday. This outpaced expectations for 5.6% in a Reuters poll and follows a 4.6% rise in October.

Retail sales climbed 10.1% in November from a year ago, the fastest pace of growth since May — though analysts had expected a 12.5% spike following a low base in 2022. Retail sales rose 7.6% in October.

“Year-on-year growth in retail sales also rose in November, thanks mainly to faster automobile and Covid-sensitive restaurant sales growth on the back of favorable base effects, although this is well below market (high) expectations and implies a negative sequential growth,” Goldman Sachs economists led by Lisheng Wang wrote in a note.

Fixed asset investment in urban areas cumulatively grew 2.9% in the first 11 months of the year, compared with expectations for 3% growth. China’s urban unemployment rate stayed at 5% in November.

Hong Kong shares, among this year’s underperformers in Asia Pacific, saw gains briefly accelerate after the release of Friday’s data. The Hang Seng pared those gains to eventually close up 2.4% on the day.

The CSI 300 benchmark of the largest blue chips listed in Shanghai and Shenzhen gave up modest gains to close down 0.3% on the day.

The post-Covid recovery of the world’s second-largest economy has so far fallen short of expectations, plagued by a festering real estate crisis, debt risks and chronic youth unemployment.

A slew of policy support measures have not sufficiently lifted economic sentiment, igniting calls for Beijing to amp up its stimulus amid fears of a deepening slowdown.

Still, there are several green shoots that point to Beijing’s focus on growth, while also underscoring the depths of the real estate malaise.

On a cumulative basis in the first 11 months, investments in infrastructure and manufacturing increased 5.8% and 6.3%, year-on-year, respectively; retail sales rose 7.2%, while real estate development investment dropped 9.4%, China’s NBS said.

Official data released earlier Friday showed that China’s new home prices fell for the fifth straight month in November, underscoring weak confidence in demand and investment as some of the largest real estate developers are facing serious debt problems as Beijing strives to deleverage its once-bloated real estate sector.

Embattled Chinese real estate developer Country Garden may avoid a default on its yuan-denominated bonds after most holders of a local note agreed not to demand repayment this week, according to Bloomberg News.

During a meeting at the Shenzhen Stock Exchange last week, most investors agreed to forego a put option expiring Dec. 13 that allows investors to demand repayment before maturity next year, the news outlet reported Tuesday, citing unnamed people with direct knowledge of the matter.

The report came after markets in Hong Kong and mainland China closed. Country Garden shares in Hong Kong closed higher by more than 8% on Tuesday, prior to the news.

CNBC has reached out to the company for comment.

Country Garden was once the largest non-state-owned developer in China by sales. It ran into financing troubles this year, and defaulted on a U.S. dollar bond last month, according to Bloomberg.

Economic growth in China has been sluggish due in part due to serious debt problems that some of the largest real estate developers are facing, as Beijing moves to deleverage its once-bloated property sector — which accounts for about 33% of its economy.

A project described as the “world’s largest offshore wind farm” took a major step forward over the weekend after producing its first power.

Located off the coast of northeast England in the North Sea, the Dogger Bank Wind Farm is being developed in three phases — A, B and C — and will have a total capacity of 3.6 gigawatts once fully up and running. A fourth phase, known as Dogger Bank D, has been proposed.

“The project’s first turbine at Dogger Bank A started turning and producing electricity at 8.37pm BST on Saturday 7 October,” the Dogger Bank Wind Farm Project said in an announcement Monday.

“Power from the first offshore wind turbine is now being transmitted to the UK’s national grid via Dogger Bank’s high-voltage direct current … transmission system, marking the first-time use of HVDC technology on a UK wind farm,” it added.

The scale of the project is considerable, with those behind it saying it will be able to power as many as 6 million homes per year. Dogger Bank is using GE Vernova’s huge Haliade-X turbines, which boast blades measuring 107 meters, or about 351 feet.

Dogger Bank is a joint venture partnership involving SSE Renewables, Equinor and Vårgrønn, which hold stakes of 40%, 40% and 20% respectively.

In a statement, SSE Chief Executive Alistair Phillips-Davies said Dogger Bank would “provide a significant boost to UK energy security, affordability and leadership in tackling climate change.”

“This is exactly how we should be responding to the energy crisis,” he added.

Equinor is a Norwegian business better known for its production of oil and gas, but it also is involved in wind energy projects like Dogger Bank and Hywind Tampen.

“A renewable mega-project like Dogger Bank constitutes an industrial wind hub in the heart of the North Sea, playing a major role in the UK’s ambitions for offshore wind and supporting its net zero ambitions,” Equinor CEO Anders Opedal said.

U.K. Prime Minister Rishi Sunak welcomed the news. Sunak — who has faced sharp criticism from some quarters after a shift in climate policy — described offshore wind as being “critical to generating renewable, efficient energy that can power British homes from British seas.”

The United Kingdom is home to a mature offshore wind sector, with the U.S. government’s International Trade Administration highlighting traits such as good wind speed, a long coastline and a “relatively shallow seabed,” among other things.

Major offshore wind farms in waters off the U.K. include Hornsea 2, a fully operational, 165-turbine facility that boasts a capacity of more than 1.3 GW. Danish energy firm Orsted has previously called it “the world’s largest installed windfarm.”

While those involved in Dogger Bank have repeatedly called it “the world’s largest offshore wind farm,” Monday’s statement also referred to it as the “world’s largest offshore wind farm under construction,” an apparent nod to the fact that significant work is still required before it’s complete.

Across the Atlantic, the U.S. has some way to go to catch up with countries like the U.K., with a range of factors creating a challenging environment for the sector’s development there.

America’s first offshore wind farm, the 30 megawatt Block Island Wind Farm, started commercial operations only in late 2016, although the U.S. is planning to ramp up its offshore wind capacity in the coming years.

In November 2021, ground was broken on Vineyard Wind 1, which has been dubbed the United States’ “first commercial scale offshore wind farm.”

BEIJING – China’s economy is running into more challenges.

Credit data for July released Friday showed a slump in demand from businesses and households to borrow money for the future. Real estate problems persist with once-healthy developer Country Garden now on the brink of default. Consumer sentiment is weak.

“The weak July credit data suggest the downward spiral of the property sector continues, and worsening geopolitical tensions add to the uncertainty,” Lu Ting, chief China economist at Nomura, and a team said in a report Friday.

“In Japan during the 1990s, corporates might have paid down their debt to improve their chances of survival, but in today’s China, corporates and households are cutting their borrowing due to a lack of confidence (and trust),” the report said.

New local currency bank loans plunged by 89% in July from June to 345.9 billion yuan ($47.64 billion), less than half the 800 billion yuan analysts had forecast in a Reuters poll.

The July new yuan loan number was the lowest since late 2009, according to Reuters.

Those figures “should mark a low” since policy moves in June could have moved up some demand, Xiangrong Yu, chief China economist at Citi, and a team said in a note.

“Yet all the factors just cannot mask how weak credit demand is and how low risk appetite is,” the analysts said, noting expectations for rate cuts by the end of September. Without such cuts, they expect a greater risk that China misses its growth target of around 5% this year.

On Tuesday, China is set to release July economic data that’s expected to show no change from June in the pace of growth for industrial production and fixed asset investment, according to a Reuters poll.  

Retail sales are expected to rise 4.7% year-on-year pace in July, slightly faster than in June, the poll showed.

China’s massive real estate sector, where the majority of household wealth is parked, has reemerged as an area of concern that it could drag down the broader economy.

Developer Country Garden announced over the weekend it was suspending trading in at least 10 of its mainland-China traded yuan bonds.

Last week, the company missed coupon payments on two U.S. dollar-denominated bonds, according to Reuters.

Country Garden’s U.S. dollar bonds account for just under half of outstanding high-yield U.S. dollar-denominated bonds, according to Goldman Sachs analysis.

China U.S. dollar bonds that are of investment grade account for 43% of the total, the analysis showed.

“Given that the majority of [high-yield] developers have either defaulted or conducted bond exchanges, we believe rising stresses amongst the remaining [high yield] developers are unlikely to have broader impact on the offshore bond market,” the Goldman analysts said in a report Friday.

“We believe of greater concern is whether rising stresses will spillover to [investment grade] developers, most of whom are state owned enterprises [SOEs].”

State-owned companies have generally found it easier to obtain loans in China, where state-owned banks dominate. State-owned developers have also fared better in terms of recent sales than non-state-owned developers, data show.

However, China’s entire real estate sector still needs to contract by about 10 percentage points to reach a similar level of GDP contribution as Japan or South Korea, said Louis Lau, director of investments and emerging markets portfolio manager at Brandes Investment Partners.

He pointed out that while real estate has contributed to about 30% of GDP in China, that share is in the lower 20 percentage points in South Korea and Japan.

In 2020, Beijing began an earnest crackdown on developers’ high reliance on debt for growth. Authorities have eased their stance in recent months, with a notable shift in late July, but stopped short of large-scale stimulus.

“The more the government tries to help the real estate industry, the longer it takes for the industry to find a reasonable bottom,” Lau said.

He is underweight China, with selective investments in some consumer names and industries he expects will outperform.

Chinese stocks soared Tuesday as Beijing pledged to ramp up measures to bolster China’s sputtering economy.

Hong Kong’s Hang Seng Index surged more than 3%, China’s tech-heavy ChiNext rose 1.8% and the Shanghai Composite Index increased 1.81% on Tuesday morning in Asia.

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Chinese property developers Country Garden and Longfor soared 14.3% and 20.7% respectively. Sunac rose 12.5%, China Vanke was up 11.02% and China Overseas Land and Investment grew 11.39%.

A day earlier, Chinese real estate stocks tumbled on renewed debt fears. The Chinese government cracked down on the property sector’s debt levels in August 2020.

The stock rebound comes after China’s top leaders pledged on Monday to ramp up policy support to boost domestic consumption as the post Covid rebound has been slower than expected.

According to official data, China’s gross domestic product in the second quarter increased 6.3% from a year ago, performing worse than the 7.3% economists predicted. This was a 0.8% growth from the first quarter, and was slower than the 2.2% quarter-on-quarter pace recorded in the January to March period.

China’s top leaders met Monday for the much-anticipated Politburo meeting and hinted at moves to “adjust and optimize” property policy in what the leadership called a “torturous” economic recovery.

State news agency Xinhua quoted the 24-member Politburo as saying “the economy is facing new difficulties and challenges.” That’s mainly due to weak domestic demand, operational challenges for companies as well as “a grim and complex external environment,” it said.

“The meeting emphasized that it is necessary to actively expand domestic demand, give full play to the basic role of consumption in driving economic growth, expand consumption by increasing residents’ income,” according to Xinhua.

“It is necessary to boost the consumption of automobiles, electronic products, and home furnishing, and promote the consumption of services such as sports, leisure, and cultural tourism,” said the report.

Hong Kong-listed shares of internet giants rose on Tuesday. Alibaba shares soared 4.7%, while Tencent was up nearly 4%. Meituan and Baidu shares were higher by 5.7% and 6.8% respectively.

In the electric vehicle space, Xpeng soared 11%, Li Auto was up 4.15% and BYD rose 2%.

“This is a reconfirmation that the [Chinese] policymakers have heard the market concern on more support needed for the domestic economy,” said Xiaolin Chen, head of international at KraneShares, on CNBC’s “Street Signs Asia” Tuesday.

“They want to achieve the 5% GDP target of this year. The first job they need to do is to create jobs for the labor force in China,” said Chen.

“I do certainly see some encouraging language released from the statement that removed a lot of the concerns of people having a high focus on real estate market, employment, private investment, and so on. So far, the language has been encouraging.”

China is ramping up measures aimed at boosting its economy ahead of a key Politburo meeting this week which will review the country’s first half economic performance.

In the past week, authorities have announced a series of pledges targeted at specific sectors or aimed at reassuring private and foreign investors of a more favorable investment environment — but they were largely broad measures, with some lacking concrete details.

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Chinese leaders have also signaled in recent weeks they are likely to be judicious and targeted in their policy support.

Here are some of the key measures released by the Chinese government in recent weeks.

On Monday, China’s economic planning agency announced a series of measures to promote private investment.

This follows a rare joint pledge on Wednesday, between the Chinese government and the Communist Party, which vowed to treat private companies the same as state-owned enterprises. Beijing also pledged to ensure fair treatment in areas ranging from intellectual property and land rights to financing and labor supply.

In a 17-point statement Monday, the National Development and Reform Commission pledged to attract more private capital to participate in the construction of major national projects and key industrial chain supply chain projects.

The NDRC said it will support private investment in sectors — such as transportation, water conservancy, clean energy, new infrastructure, advanced manufacturing and modern agriculture facilities.

The agency is also encouraging private investment projects to issue real estate investment trusts (REITS) in the infrastructure sector to promote asset diversification and further broaden investment and financing channels for private investment.

The People’s Bank of China and the State Administration of Foreign Exchange last Thursday adjusted their cross-broader financing guidelines to allow companies to borrow more from foreign sources.

Business sentiment has generally soured amid lackluster economic growth after China’s initial recovery following its exit from “zero Covid” faltered.

The last three years have also seen heavy-handed crackdowns on internet platform companies including ecommerce giant Alibaba; the education and gaming sectors as well as real estate developers.

“After making life more difficult for many private firms in recent years, China’s leadership is shifting course and has made high-level pledges to improve the business environment,” Julian Evans-Pritchard, head of China Economics at Capital Economics, wrote in a Friday note.

“But although parts of the service sector would benefit from a more supportive official stance, much of the current caution among private firms reflects wider economic headwinds against which regulatory tweaks are of limited use,” he added.

Last Monday, official data showed China’s GDP for the second quarter grew 6.3% from a year ago, missing market expectations for 7.3%. It marked a 0.8% growth compared to the first quarter, and was slower than the 2.2% quarter-on-quarter pace recorded in the January to March period.

Even with a low base from last year, given the Covid lockdown in Shanghai at that time, retail sales growth slowed significantly to 3.1% in June from a year before, compared to 12.7% in May.

Last week, within hours of the NDRC statement, China’s Commerce Ministry followed with an joint announcement with a dozen other government departments, announcing an 11-point plan to boost the domestic consumption of household consumer goods and services.

This included a directive to local governments to step up the renovation of old homes, a pledge to encourage improvements to online commercial platforms, and developing the concept of “15-minute cities.”

During a special press conference on Friday, the NDRC released a 10-point plan to increase car ownership, particularly for “new-energy” vehicles.

This will include improving the capacity of rural power grids, reducing the costs associated with purchasing and charging electric vehicles.

In June, Beijing extended tax breaks for the purchases of electric vehicles.

Reaction from Chinese banks were muted. Hong Kong-listed shares of China Construction Bank and Bank of China were flat, ICBC was up 0.28%.

In November, China’s financial authorities rolled out a 16-step guideline to shore up its housing sector, and “relevant policies” will now be now extended to the end of 2023, the People’s Bank of China announced.

Xinhua reported that the move is to “guide financial institutions to continue deferring loan payments for real estate enterprises, while propping up financial support for the real estate enterprises to ensure the delivery of housing projects.”