China’s July Economic Data Disappoints: Retail Slowdown Indicates Weak Domestic Demand Stimulus

China’s industrial value-added output in July grew by 5.7% year-on-year, hitting an eight-month low; retail sales growth slowed to 3.7%, the slowest since December last year. Both figures fell below market expectations of 6% and 4.6%. Experts interviewed noted that although industrial value-added output fell short of expectations, when examining the distribution of industry growth, it aligns with China’s industrial upgrading goals. On the other hand, the slowdown in retail sales is a cause for concern, indicating that the stimulus for domestic demand is still inadequate and requires more policy support in consumer sectors. According to the latest data released by China’s National Bureau of Statistics on Friday, August 15, the growth rate of industrial value-added output in July fell by 1.1 percentage points compared to June, with a month-on-month growth of 0.38%, 0.12 percentage points lower than in June. In July, manufacturing value-added output grew by 6.2% year-on-year, a decrease of 1.2 percentage points from June. The growth rate of high-tech manufacturing and equipment manufacturing was 11.2% and 6.7%, respectively, indicating a positive trend in these sectors. Additionally, investment in fixed assets in the first seven months maintained a stable growth, with a year-on-year increase of 7.8%. However, considering the uncertainties brought by the external environment, experts suggest that it’s crucial for China to strengthen policy coordination and introduce targeted measures to stimulate domestic demand and stabilize economic growth.