China posts slight retail sales growth in July but industrial data disappoints

BEIJING – China’s retail sales grew more than expected in July, while industrial production missed expectations, the National Bureau of Statistics said on Thursday.

Retail sales rose 2.7% in July from a year earlier, beating expectations for 2.6% growth, according to a Reuters poll.

Industrial production rose 5.1%, below the poll’s forecast of 5.2%.

Fixed-asset investment rose 3.6% in the first seven months of the year, below the 3.9% growth analysts had expected. Within fixed-asset investment, pressure on real estate was exacerbated, falling 10.2% year-on-year through July, compared with a 10.1% decline through June.

Growth in the infrastructure and manufacturing components also slowed during the year from July compared to June.

The urban unemployment rate rose to 5.2% in July from 5% in June.

“The pain is occurring as old growth drivers are replaced by new ones,” the statistics office said in an English-language version of the statement, citing the “negative impact” of the external environment and insufficient domestic demand.

Other data released for July over the past two weeks suggested that consumer demand remains sluggish.

China’s consumer prices rose 0.5% in July from a year earlier, beating expectations, thanks to higher pork prices. Excluding food and energy prices, the core CPI rose 0.4%, down from 0.6% the previous month.

Trade data for July showed imports rose by a faster-than-expected 7.2% from a year earlier, while exports grew by a weaker-than-expected 7%.

GDP in the second quarter grew a disappointing 4.7% compared to last year.

But Beijing has not significantly increased its stimulus plans beyond expanding trade and upgrading equipment.

At the long-awaited Third National Congress and Politburo meetings in July, Chinese authorities reiterated that the country would work toward an annual growth target of around 5 percent, and stressed longer-term goals for developing advanced technology and other “new growth engines.”

China’s economy faces challenges not only from the external environment but also from structural transformation — “the pain we must experience in the process of pushing for high-quality development,” an official from the National Development and Reform Commission, China’s economic planning agency, told reporters earlier this month, according to a CNBC translation of the remarks in Mandarin.

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