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China's factory output, retail sales slow, miss expectations

China's factory output, retail sales slow, miss expectations

FILE PHOTO: A man looks at his mobile phone while standing on a balcony overlooking the central business district in Beijing, China December 15, 2020. REUTERS/Thomas Peter

BEIJING: China's factory output and retail sales both rose more slowly than expected in July from a year ago, data showed on Monday (Aug 16), amid signs of increasing pressure on China's economy as export growth cooled and new COVID-19 outbreaks disrupted business.

Industrial production in the world's second largest economy increased 6.4 per cent year-on-year in July, against expectations for 7.8 per cent growth and after rising 8.3 per cent in June.

China's economy has rebounded to its pre-pandemic growth levels, but the expansion appears to be losing steam as businesses have grappled with higher costs and supply bottlenecks while new COVID-19 infections in July prompted some local authorities to lock down and temporarily suspend business operations.

Data earlier this month also showed export growth, which has been a key driver of China's impressive rebound from the COVID-19 slump in early 2020, unexpectedly slowed last month.

Consumption remained weak with retail sales rising 8.5 per cent year-on-year in July. Analysts had expected retail sales to increase 11.5 per cent after a 12.1 per cent uptick in June.

China has tightened social restrictions to fight its latest COVID-19 outbreak in several cities, hitting the services sector, especially travel and hospitality in the country.

Fixed asset investment grew 10.3 per cent in January to July from the same period a year ago, compared with an 11.3 per cent rise tipped by a Reuters poll and a 12.6 per cent increase in January to June.

Private sector fixed-asset investment, which accounts for 60 per cent of total investment, grew 13.4 per cent in the first seven months of the year, compared with a 15.4 per cent gain in January to June.

Property investment, a crucial growth driver of China's recovery from COVID-19 disruptions, grew 12.7 per cent in January to July, versus 15 per cent rise in the first half of this year.

Source: Reuters/vc

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