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August 17, 2021

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Economy stays on path of recovery

CHINA’S economy continued to recover in July, but the growth for industrial output and retail sales slowed due to new COVID-19 outbreaks and natural disasters in some regions as well as increased uncertainties from abroad, official data showed yesterday.

The country’s industrial production grew by 6.4 percent in July from a year earlier, slowing from the rise of 8.3 percent in June, according to the National Bureau of Statistics. The figure missed the forecast of 7.8 percent increase by Reuters and 7.9 percent rise by Bloomberg, and saw an average two-year growth of 5.6 percent.

Retail sales of consumer goods rose by 8.5 percent year on year last month, down from the 12.1 percent increase in June. It was below the projection of an 11.5 percent rise by Reuters and 10.9 percent growth by Bloomberg, and saw an average two-year growth of 3.6 percent.

“In July, some major indicators saw slowing growth due to the increase in overseas uncertainties and the impact of domestic floods and COVID-19 cases. But the indicators were still in a reasonable range, and the economy continued to recover,” said NBS spokesman Fu Linghui.

Fixed-asset investment went up by 10.3 percent in the first seven months. The figure was against Bloomberg’s 11.3 percent growth expectation and saw an average two-year growth of 4.3 percent. Investment in the private sector grew by 13.4 percent between January and July, accounting for 60 percent of total investment.

The surveyed jobless rate stood at 5.1 percent in July from 5 percent in June. China has set a target of 5.5 percent for the unemployment rate for the whole year.

The slowdown in major economic indicators resulted from a slew of growth headwinds, including heavy rainfalls and floods in Henan Province and the Yangtze River Delta region, outbreak of the Delta variant of the coronavirus in Nanjing, as well as targeted tightening measures in the property sector, said Lu Ting, chief China economist at Nomura.

Talking about the impact of floods on consumption, Fu said July’s consumption in provinces like Henan, Jiangsu and Hunan fell to varying degrees from June, and sectors like hotels and restaurants also saw slowing growth.

Fu said the slowdown was short-term and consumption recovery will likely continue. With more people vaccinated and new cases under control, as well as the rise in employment and residents’ income, the consumer market is expected to remain stable.


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