Sifting through China’s economic data has become an art form. On Wednesday, another batch of numbers was rolled out, illustrating the flashpoints of cooling demand and Beijing’s efforts to stem the tide.

The numbers for industrial output and investment grew faster than expected last month but this was probably due to a raft of government measures to stimulate growth.

As for the closely anticipated figures for the retail sales sector, they failed to match expectations as shoppers reined in spending amid a credit squeeze, a slowing economy and the trade war with the United States.

“There are myriad reasons for this step-down in consumer spending: the increase in mortgage debt is eating into disposable income, investment returns are falling and the closure of many online lenders is cutting off a key source of consumer finance,” Everbright Sun Hung Kai, a leading regional financial firm, said in a note.

A glance at the figures showed that retail sales increased by 8.6% last month from a year earlier, the National Bureau of Statistics reported, which was the slowest pace of expansion since May and a significant dip from September’s 9.2%.

Moreover, this comes at a time when car sales are stalling with analysts predicting the first annual contraction since 1990, while the property market is suffering stress fractures with home sales falling again in October.

‘We expect the effect of the personal income tax cut will start to be felt in November when retail sales may gain some traction’

“Almost all categories in retail sales disappointed in October,” Iris Pang, the Greater China economist at ING bank in Hong Kong, told Reuters. “We think the government’s fiscal stimulus came in too late, and people now tend to save more and spend less.

“We expect the effect of the personal income tax cut will start to be felt in November when retail sales may gain some traction,” she added.

Yet the statistics highlight the dilemma Beijing is facing as it realigns the economy from export-fueled, mid-range manufacturing to high-tech production and rising domestic demand.

Still, at least industrial output edged higher to 5.9% last month from 5.8% in September, according to the NBS. Fixed-asset investment growth also increased to 5.7% between January to October.

Naturally, infrastructure spending played a key role, rising to 3.7% in the first 10 months compared with 3.3% during the same period in 2017.

But then, Beijing has loosened the purse strings to start major road and rail building projects.

“Fiscal stimulus money is finally being spent on infrastructure, which pushed up fixed-asset investment growth,” Pang at ING Bank said. “Front-loading of exports [to the US before tariffs kick in] supports manufacturing, which explains higher industrial production growth.”

So far, President Xi Jinping’s policymakers have managed to walk an economic tightrope without falling off which is an art in itself.

But how long they can maintain this balancing act, with a trade war elephant tiptoeing across at the other end, is the key question.