Jade Gao | AFP | Getty Images BEIJING — China reported July data that was well below expectations. Retail sales rose 2.7% in July from a year earlier, the Office for National Statistics said on Monday. That’s well below the 5% growth forecast in a Reuters poll and below June’s 3.1% growth. In retail sales, the categories catering, furniture and construction showed a decline. Sales of cars, one of the largest categories by value, rose by 9.7%. The gold, silver and jewelery category saw the largest increase in sales, up 22.1%. Industrial production rose 3.8 percent, also missing expectations for 4.6 percent growth and down from the previous month’s 3.9 percent gain. Fixed asset investment for the first seven months of the year rose 5.7% from a year earlier, missing expectations for growth of 6.2%. Investment in real estate fell at a faster pace in July than in June, while investment in manufacturing slowed. Infrastructure investment grew at a slightly faster pace in July than in June. Fixed asset investment figures are published on a year-to-date basis only. The unemployment rate among China’s youth aged 16 to 24 was a high 19.9%. The unemployment rate for all ages in the cities was 5.4%. “The national economy maintained its momentum of recovery,” the statistical office said in a statement. But he warned of growing “risks of stagflation” worldwide and said “the foundations for domestic economic recovery are not yet solid”.
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Analysts’ forecasts for July are expected to show a recovery in economic activity from June as China moves past the worst of this year’s Covid-related lockdowns, especially in the Shanghai metropolis. Exports remained robust last month, rising 18% year-on-year in US dollar terms, despite growing concerns about falling global demand. Imports lagged, rising just 2.3% in July from a year earlier. However, China’s huge property sector has come under renewed pressure this summer. Many homebuyers have stopped their mortgage payments to protest builders’ delays in building homes, which are typically sold before completion in China. Deteriorating confidence threatens developers’ future sales — and an important source of cash flow. The possibility of a Covid outbreak remains another drag on sentiment. A wave of infections in tourist destinations, especially in the island province of Hainan, stranded tens of thousands of tourists this month. The local situation reflects the wide gap between the goals set at the beginning of the year and the subsequent reality. Hainan had set a GDP target of 9%, but managed to grow only 1.6% in the first six months. Similarly, nationally, China’s GDP grew by just 2.5% in the first half of the year, well short of the full-year target of 5.5% set in March. China’s top leaders said at a meeting in late July that the country may miss its GDP target for the year. The meeting did not signal any upcoming large-scale stimulus, while pointing to the importance of stabilizing prices. The country’s consumer price index hit a two-year high in July as pork prices rebounded. This is breaking news. Check back for updates.
