Beijing’s latest data release brought bad news from the Chinese economy right when growth is starting to grind to a halt elsewhere in Asia and in Europe.

The Friday release showed that retail sales grew at their slowest pace in over 15 years in November. Factory output was also at a three-year low amid a trade war with the United States and softening domestic consumption.

These latest setbacks add to the growing list of economic challenges faced by Chinese policymakers. Heading into 2019, it looks as though the Chinese growth miracle will face its first serious test since the Great Recession of 2008-2009. And this time, the old playbook of fiscal and monetary stimulus might not be enough to get the job done.

Background

Industrial output rose 5.4% in November, missing the consensus estimate of 5.9% assembled by Reuters. Factory output hasn’t been this low since early 2016. That the numbers would come in lower was to be expected given the ongoing US-China trade war; what was far less expected was the sudden plunge in domestic demand, which has compounded the impact of global factors. Sales of big-ticket items, notably automobiles, have been trending downward over the course of 2018. In November sales fell over 18% and are currently tracking to post their first year-on-year decline since the 1990s.