China’s retail sales, factory activity lagged in July
The weak economic data indicate that the economy faces further downside risks that require a more effective policy response, says economist.
China's retail sales and factory activity grew at a slower pace in July, according to official data released on Monday. This lagged performance, falling short of forecasts, highlights the persistent challenges facing the world's second-largest economy despite booming exports and high-tech sectors. The National Bureau of Statistics (NBS) reported retail sales grew by 0.6% in July, below the 1.5% forecast, and industrial production growth slowed to 4.5% on-year, also below expectations.
Geopolitical tensions and global energy market instability, as well as severe weather events, have added to the economic pressure. NBS spokesman Fu Linghui noted these factors during a news conference, emphasizing that authorities have taken steps to address internal and external risks. However, fixed-asset investment in the first seven months of the year fell by 6.7% year-on-year.
Economists, including Pinpoint Asset Management's president Zhiwei Zhang, suggest the weak data indicates the economy faces further downside risks that necessitate more effective policy responses. Despite a promise of stronger fiscal spending in a late July Politburo meeting, Zhang believes the implementation and transmission of such policies may take time.
Economists argue that China should transition to a growth model driven more by household spending rather than relying on the traditional sectors of real estate and infrastructure investment. July's trade data showed exports and imports surging due to heightened overseas demand for AI-related technology products, providing some relief to the manufacturing sector.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
