Workers work on an air conditioner production line at the Midea factory in Guangzhou, China.
Jade Gao | AFP | Getty Images
BEIJING – China reported data for July that came in well below expectations.
Retail sales rose 2.7% in July from a year earlier, the Office for National Statistics reported on Monday. That’s well below a Reuters poll of 5% growth forecast and down from June’s 3.1% increase. A decline was observed in categories related to retail sales, catering, furniture and construction.
Sales of cars, one of the largest categories by value, increased by 9.7%. Sales in the gold, silver and jewelry category grew the most, up 22.1%.
Industrial production rose 3.8%, but missed expectations for a 4.6% increase and a 3.9% increase from the previous month.
For the first seven months of the year, fixed investment rose 5.7% from a year ago, missing expectations for a 6.2% increase.
In July, investment in real estate decreased faster than in June, while investment in manufacturing slowed down. Infrastructure investments grew slightly faster in July than in June. Investment data on fixed assets is disclosed only one year to date.
The unemployment rate among young people aged 16-24 in China was a high 19.9%. The unemployment rate for all ages in the cities was 5.4%.
The statistics office said in a statement: “The national economy has maintained its pace of recovery. But it warned of rising “stagflation risks” globally and said “the foundation for domestic economic recovery has yet to be consolidated.”
Analyst forecasts for July had predicted a pick-up in economic activity from June as China moved past the worst of this year’s Covid-related lockdowns, particularly in the metropolis of Shanghai.
Exports remained strong last month, up 18% year-over-year against the U.S. dollar, despite growing concerns about a slowdown in global demand. Amounts lagged behind a year-ago July increase of just 2.3%.
However, China’s huge real estate sector came under pressure again this summer. Many home buyers have stopped making mortgage payments Protesting builders’ delays in building homes in China, which typically sell before completion.
It puts a strain on trust Developers’ future sales – and an important source of cash flow – are at risk.
The potential for a Covid outbreak remained another drag on sentiment. Increasing infections in tourist destinations, especially in Hainan Island Province, Tens of thousands of tourists were stranded this month.
The local situation reflects a large gap between the goals set at the beginning of the year and the reality afterward. Hainan had set a 9% GDP target, but only managed to grow 1.6% in the first six months.
Similarly, at the national level, China’s GDP grew by just 2.5% in the first half of the year, running well below the full-year target of 5.5% set in March.
China’s top leaders hinted at a meeting in late July the country may miss its GDP target for the year. While the importance of stabilizing prices was noted at the meeting, no large-scale stimulus was announced.
of the country consumer price index has reached the highest level of the last two years in July as pork prices rose again.
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