Key indicators point to slowdown in China
Print Edition
THERE were more signs of weakness in the world’s second-largest economy in July, as data released yesterday pointed to slower growth in several key areas.
According to the National Bureau of Statistics, China’s industrial production in the month rose 6 percent year on year, down from 6.8 percent in June and its slowest in four months.
Retail sales increased 10.5 percent to 2.43 trillion yuan (US$380 billion) in July, slowing from 10.6 percent in June, while fixed-asset investment in the first seven months rose 11.2 percent to 28.8 trillion yuan, weakening from 11.4 percent in the first six months.
“The data indicated quite sluggish economic activity and little improvement in growth momentum,” said Liu Ligang, an economist at Australia & New Zealand Banking Group.
“If the conditions do not change in the coming months, China’s economic growth could fall below 6.5 percent in the third quarter,” he said.
The country’s gross domestic product grew 7 percent in the first half, in line with the government’s full-year target of “about 7 percent.”
The publication of the NBS data follows the release of other indicators suggesting economic weakness.
On Saturday, the General Administration of Customs said exports fell 8.9 percent in July, while imports dropped 8.6 percent.
The official Purchasing Managers’ Index, a gauge of operating conditions in mostly state-owned manufacturing companies, fell to 50 last month, from 50.2 in June, while the Caixin PMI, a gauge of activity in the private and export sectors, fell to a two-year low of 47.8.
In a bid to support the economy, the government has cut the interest rates four times and lenders’ reserve requirement three times since November, while accelerating investment in infrastructure development projects.
“The latest data suggest the recovery is built on fragile foundations,” said Zhu Haibin, chief economist for China at JPMorgan.
“The government may continue with its easing policies, and make them more targeted ... given the inflation rate has stayed stable,” he said.
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