China’s Economic Momentum Weakens as July Data Point to Broader Slowdown

By Staff, Agencies

China’s economic growth showed signs of losing momentum in July, with industrial production, consumer spending and investment all weakening amid continued pressure on domestic demand and the troubled property sector.

Industrial production increased 4.5% year-on-year in July, significantly below the 5.3% growth recorded in June and weaker than economists had expected.

The slowdown came alongside a rise in unemployment, which reached 5.2% in July, up from 5% the previous month, adding to concerns about the strength of China’s economic recovery.

The delayed release of the latest figures by China’s National Bureau of Statistics also fueled speculation over the health of the world’s second-largest economy and contributed to expectations that the People’s Bank of China [PBOC] could consider cutting interest rates to support growth.

Consumer demand remained subdued. Retail sales increased just 0.6% in July, down from 1% growth in June and below market expectations.

Investment activity also weakened sharply, with fixed-asset investment declining 6.7% during the month.

China’s property sector remained a major drag on the economy. Real estate investment fell 19.2% year-on-year in July, while residential property sales dropped 13.2%, underscoring continued weakness in one of the country’s key economic sectors.

The latest figures suggest that China is facing a combination of slowing industrial activity, weak household consumption and persistent problems in the property market, raising fresh questions over the strength of economic growth in the second half of the year.