China’s worse-than-expected 4.5% yearly rise in industrial production in July, following a 5.3% rise the previous month, showed that the country’s economy lost momentum, while consumer spending slowed and urban investments contracted.
Coupled with unemployment climbing to 5.2% in July from 5% in June, the situation showed that industrial production is slowing and weakness in domestic demand and the real estate sector continues.
The Chinese National Bureau of Statistics’ failure to release the data at the expected time also fueled concerns over the health of the world’s second-largest economy.
The situation also contributed to expectations that the People’s Bank of China (PBOC) may cut rates.
China’s retail sales climbed 0.6% in July, below estimates, following a 1% rise in June, while fixed-asset investments fell 6.7% at the same time.
China’s real estate investments fell 19.2% year-on-year in July, and residential real estate sales dropped 13.2%.
Chinese industrial production remains strong despite easing
Sadi Kaymaz, an Asian markets analyst, told Anadolu that China’s industrial production remains relatively resilient as the country’s industrial robot production surged 30% and integrated circuit production jumped 21%.
Kaymaz stated that there was a slowdown in nearly every category except high-tech manufacturing sectors and that the slowdown has become a trend by now, as extreme weather events last month affected logistics centers and warehouses in some regions of the country.
He noted that government officials might deem the July data a short-lived setback and wait for the August data to be released.
“China may not see the 4.5% economic growth target and growth could drop to around 4%,” he said.
Kaymaz mentioned that Chinese Premier Li Qiang called for accelerating the country’s new growth drivers.
“Beijing is approaching growth via qualitatitve assesment rather than quantitative figures, and it seems content with high-tech manufacturing developments, so that’s why we don’t expect a significant stimulus package,” he said, noting that even if a package was announced, it would be aimed at meeting the minimum growth target of 4.5%.
“The Politburo met at the end of last month and the deterioration in leading indicators was one of the main agenda items but no stimulus measures were announced,” he added.