China retail sales growth lower than expected in July
CHINA’S retail sales and industrial production grew at a slower rate than expected last month, official data showed Friday, as the world’s number two economy battles trade turmoil and persistent sluggish consumption.
Retail sales, a key gauge of consumer demand, grew 3.7 per cent year-on-year in July, according to data published by the National Bureau of Statistics (NBS).
The figure fell short of the 4.6 per cent growth forecasted by Bloomberg analysts, with July being the second month in a row of slowing consumption growth after June’s 4.8 per cent.
A long-term crisis in the real estate sector and high youth unemployment have been weighing on Chinese consumer sentiment for several years.
The situation has worsened with the heightened turmoil sparked by US President Donald Trump’s trade war.
Trump has imposed tolls on China and most other major trading partners since returning to office in January, threatening Beijing’s exports just as it becomes more reliant on them to stimulate economic activity.
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Industrial production for July was also below expectations, growing 5.7 per cent year-on-year as opposed to Bloomberg’s predicted 6.0 per cent.
Beijing and Washington have sought to de-escalate their row, with both sides announcing this week another 90-day extension to a truce first reached in May.
“The economic momentum is weakening, despite... strong export growth,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note on Friday.
Beijing last year announced a string of measures to reignite growth, including cutting interest rates, cancelling restrictions on homebuying, hiking the debt ceiling for local governments and bolstering support for financial markets.
“The boost from the fiscal subsidies for some consumer goods is fading,” Zhang said.
“I think the policy makers will wait and monitor how fast the economy will slow in Q3, and decide if fresh policy support is necessary in Q4.”
The surveyed unemployment rate - another notable figure as millions of young people struggle to find suitable work - was 5.2 per cent in July, up two percentage points from June, according to NBS data.
“Looking ahead, we see little reason to expect much of an economic recovery during the rest of this year,” Zichun Huang of Capital Economics wrote in a note. AFP
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