[Source – business-standard.com]
Sluggish Retail Sales and Industrial Production
China’s retail sales, industrial production, and urban investment for August grew at a slower pace than anticipated, according to data released by the National Bureau of Statistics (NBS) on Saturday. Retail sales saw a 2.1% year-on-year increase, falling short of the 2.5% growth expected by economists polled by Reuters. This figure also marked a decline from the 2.7% rise recorded in July.
Industrial production increased by 4.5% in August compared to the previous year, also below the projected 4.8% growth and slower than the 5.1% rise seen in July. Despite the slowdown, China’s economic growth slows in August, with industrial production outpacing retail sales, highlighting the persistent supply-demand imbalance in the country’s economy. “Stronger supply and weaker demand” remain key issues, noted Darius Tang, Associate Director at Fitch Bohua.
Investment and Unemployment Trends
Fixed asset investment, which measures infrastructure, manufacturing, and real estate development, grew by 3.4% from January to August, slightly underperforming expectations of 3.5%. Real estate investment saw a sharp decline, falling by 10.2% for the year through August, the same rate as in July.
Meanwhile, China’s urban unemployment rate rose slightly to 5.3% in August, up from 5.2% the previous month. National Bureau of Statistics spokesperson Liu Aihua attributed the rise to the graduation season and emphasized the need for further efforts to stabilize employment. The unemployment rate among youth aged 16 to 24, not in school, was reported at 17.1% in July.
Challenges and Future Stimulus
China’s Economic Activity Cools More Than Expected
The Chinese economy faces multiple challenges as it continues to recover from the COVID-19 pandemic. While China’s economic growth slows in August, imports saw modest growth of just 0.5%, whereas exports performed better, rising by 8.7%.. Despite these gains, the consumer price index for August grew by only 0.6%, missing analysts’ expectations. Experts predict that the Chinese government may introduce more gradual stimulus measures in the fourth quarter to boost consumption and support the real estate sector.
China is set to celebrate the Mid-Autumn Festival this week, with public holidays from Sunday to Tuesday.
