China retail sales up 10.2% in July, misses expectations

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BEIJING : China’s economy is still struggling as it continues to restructure its older industrial sectors amid a slowdown. China’s retail sales growth slowed sharply in July and missed expectations in a disappointing sign for the world’s second-largest economy.

China is a key driver of the world economy but grew at its slowest rate in a quarter of a century last year, and has decelerated further since then.

According to several economic data for July released on Friday, the country’s gross domestic product grew 6.7 percent year on year in the second quarter flat with the first quarter. But other economic indicators showed downward pressure.

Retail sales rose 10.2 percent in the month, a marked slowdown from June’s 10.6 percent increase and below the median forecast of 10.5 percent in a news poll of economists, the National Bureau of Statistics (NBS) said.

China’s industrial production expanded 6 percent annually last month, a tad below the 6.2-percent growth in June, the National Bureau of Statistics said in a statement yesterday.

Foreign direct investment in the Chinese mainland fell 1.6 percent year on year in July from a 9.7 percent increase in June.

The NBS further said Industrial output in the Asian giant rose 6.0 percent in July over the year before, while fixed asset investment (FAI) rose 8.1 percent in the first seven months of the year. Those figures also missed expectations of 6.2 percent and 8.9 percent respectively.

The NBS said in a statement that China’s economy is basically steady in July but serious disasters from flooding and high temperatures in some parts of the country caused some indicators to slow.

However, overall economic development kept performing in a proper range with steady pace, as a result of stable employment and prices, deepened supply-side structural reform and accumulated new impetus. it said.

NBS spokesman Sheng Laiyun said it was reasonable for FAI growth to fall long-term as the economy shifts away from traditional heavy industries toward the service sector, which does not require as intensive investment.

Authorities have set a goal to cut 45 million tonnes of annual steel capacity this year with the official Communist mouthpiece People’s Daily this week saying around 21 million tonnes had been eliminated by July. But actual production of the metal was up 2.6 percent year-on-year in July to 66.81 million tonnes, the NBS figures showed. The disappointing investment figures raise doubts over the effectiveness of policy easing, Julian Evans-Pritchard of Capital Economics said in a note.

Source : AFP

 

 

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