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Bloomberg
China’s economic recovery continued in July with industrial growth remaining steady, even as weak retail sales undercut the rebound.
Industrial output rose 4.8% in July from a year earlier, the same as in June, but lower
than economists’ expectations. Overall retail sales fell 1.1%, compared to a projected 0.1% increase. The July data show that China’s recovery is still uneven, with consumption unable to keep up with the rebound in industrial output. For a sustainable return to trend growth, China will need a strong rebound in private consumption as rising tensions with the US and the possibility of a resurgent coronavirus both pose risks to the surprisingly strong external demand so far this year.
“Clearly the hope for a fast recovery has faded — the consumption still lags behind and the job market is still under pressure,†said Zhou Hao, a senior Emerging Markets economist at Commerzbank AG in Singapore. With policy makers emphasizing risk control and rolling back some stimulus, “growth momentum will be slowing down in near future,†he said.
China stock and currency markets showed little reaction to the data. The CSI 300 benchmark index was up 0.2% in morning trading.