Employees work on the air conditioning production line at the Midea factory in Guangzhou, China.
Ngoc Gao | AFP | beautiful pictures
BEIJING – China reported data for July that was much lower than expected.
Retail sales rose 2.7% in July from a year ago, the National Bureau of Statistics said on Monday. That was far below the 5% growth forecast in a Reuters poll and down from the 3.1% growth in June. In retail sales, categories related to food service, furniture and construction all fell.
Auto sales, one of the largest categories by value, rose 9.7%. The group of gold, silver and jewelry products saw the strongest increase in sales, up 22.1%.
Industrial production rose 3.8%, also without expectations of 4.6% growth and down from the previous month’s 3.9% gain.
Fixed-asset investment in the first seven months of the year rose 5.7% from a year ago, without expectations of 6.2% growth.
Investment in real estate fell at a faster rate in July than in June, while investment in manufacturing slowed its growth. Investment in infrastructure in July increased at a slightly faster rate than in June. Fixed asset investment data is only released annually.
The unemployment rate among young Chinese, aged 16 to 24, is as high as 19.9%. The unemployment rate for all ages in the cities is 5.4%.
“The national economy maintains its recovery momentum,” the statistics agency said in a statement. But it warned of “stagflation risks” growing globally and said “the foundations for the recovery of the domestic economy have not yet been solidified.”
Analysts’ forecasts for July are set to see an uptick in economic activity compared to June, when China put the worst of its Covid-related lockdowns this year, especially in the capital Shanghai.
Exports remained strong last month, up 18% in US dollar terms year-over-year despite growing concerns about falling global demand. Imports fell, rising only 2.3% in July from a year earlier.
However, China’s huge real estate sector has come under renewed pressure this summer. Many homebuyers pause their mortgage payments to protest developer delays in building homes, which are often sold before completion in China.
Decline in trust The developer’s future sales – and an important source of cash flow – are at risk.
The possibility of a Covid outbreak remains another drag on sentiment. Infections are on the rise in tourist destinations, especially in Hainan province, has stranded tens of thousands of tourists this month.
The local situation reflects the large gap between the target set at the beginning of the year and the reality next. Hainan has set a GDP target of 9%, but could only grow 1.6% in the first six months of the year.
Similarly, at the national level, China’s GDP grew by just 2.5% in the first half of the year, well below the full-year target of around 5.5% set in March.
China’s top leaders pointed out at a meeting in late July the country may miss its GDP target for the year. The meeting did not signal any large-scale stimulus to come, while noting the importance of stabilizing prices.
Country Consumer price index hits two-year high in July when pork prices rose again.
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