China's Economic Growth Hits a Snag with Slow Factory Output and Retail Sales
In July, China's factory output and retail sales both slowed, missing forecasts and highlighting challenges for policymakers. Despite a temporary trade truce with the U.S., weak domestic demand and factory-gate deflation continue to hinder growth, prompting increased government measures to support the economy.
- Country:
- China
China is facing significant economic challenges as its factory output and retail sales figures for July fell short of expectations, according to data released by the National Bureau of Statistics (NBS) on Friday. This underscores the difficulties policymakers encounter in stabilizing the economy amid domestic and international pressures.
Industrial production grew by 5.7% year-on-year, marking the slowest increase since November 2024 and falling below the 5.9% forecast. The ongoing trade truce with the U.S. has temporarily shielded Chinese goods from higher tariffs, yet manufacturing profits are suffering due to tepid demand and deflation.
Retail sales, an indicator of consumer spending, rose by 3.7% in July, a decline from June's 4.8%, also missing forecasts. Despite government interventions to boost consumption and control price competition, China's economic growth faces threats from continued global uncertainties and extreme weather events disrupting production.
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