Key facts
- China's industrial output grew 4.5% year-on-year in July.
- Retail sales in China increased by 0.6% year-on-year in July.
- Fixed-asset investment contracted 6.7% in the first seven months of the year.
- July's industrial output growth slowed from June's 5.3% increase.
- July's retail sales growth slowed from June's 1% increase.
- Both industrial output and retail sales figures missed analyst expectations.
China's industrial output grew 4.5% year-on-year in July, a slowdown from the 5.3% increase recorded in June and below the 4.8% expected by analysts. Retail sales, a key indicator of consumer spending, rose by 0.6% in July, also decelerating from a 1% increase in June and falling short of the 1.5% forecast. Fixed-asset investment experienced a contraction of 6.7% in the first seven months of the year, worsening from a 5.7% decline in the January-June period and missing expectations for a 6% decrease. Analysts attributed the slowdown in retail sales to a pull-forward effect from earlier policy incentives, such as trade-in programs and car purchase tax cuts. Auto sales declined for a tenth straight month, contrasting with strong external demand. Economic indicators released so far point to a weak start to the third quarter, with the manufacturing PMI unexpectedly slipping into contraction. Robust exports have supported factories, but weak domestic demand remains a major risk.