China's industrial output slows in July, retail sales miss forecasts

China's economy slowed at the start of the second half as industrial output and retail sales fell due to extreme weather disruptions and weak domestic demand, according to data released by the National Bureau of Statistics. Factory output grew 4.5% year-over-year in July, missing forecasts for 4.8% growth. Retail sales only increased 0.6%, down from 1% growth in June.

Analysts suggest policymakers need to be more proactive in spending available funds to boost domestic demand as investment declined sharply. While the economy still depends on exports, weak domestic demand poses a major risk to China's growth prospects.