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The picture shows cars prepared for export at the Haitong Automobile Terminal yard of Taicang Port in Suzhou City, Jiangsu Province, China on August 10, 2024.
Nurphoto | Nurphoto | Getty Images
BEIJING — China’s retail sales of consumer goods rose more than expected in July, but industrial production fell short of forecasts, the National Bureau of Statistics said Thursday.
Retail sales rose 2.7% in July from a year earlier, beating expectations for a 2.6% increase, according to a Reuters poll.
Bruce Peng, chief economist and head of Greater China research at JLL, pointed out that excluding automobiles, retail sales of consumer goods grew 3.6% year-on-year in July, higher than 3% in June.
Pang said consumer spending helped offset weak investment in July, adding that it will be important to see whether retail sales in August and September pick up enough to make consumption, rather than investment, the main contributor to economic growth.
Industrial output rose 5.1% in July from a year earlier, below the 5.2% forecast in the survey.
Fixed asset investment grew 3.6% in the first seven months of the year, below analysts’ forecasts of 3.9%. Within fixed asset investment, real estate dragged down further, falling 10.2% year-to-date through July, compared with a 10.1% decline through June.
Full-year growth in infrastructure and manufacturing components also slowed in July compared with June.
Goldman Sachs analysts said in a note that the miss in fixed-asset investment showed that “the drag from adverse weather conditions and continued subdued property investment outweighed the boost from continued gradual policy easing.”
As of August 1, at least 25 major floods have occurred in China this year. The highest number ever The Ministry of Water Resources said water resource records began in 1998. Major cities such as Shanghai also reported Record-breaking heat wave This summer.
The urban unemployment rate rose slightly to 5.2% in July from 5% in June.
“There will be some pain in the transition from old to new growth drivers,” the NBS said in the English-language report, noting that the external environment and insufficient domestic demand had “adverse effects.”
Although Beijing has stressed the lack of domestic demand over the past few years, senior leaders made it clear at a Politburo meeting in late July that Consumption should be the focus Expand this demand.
However, Beijing has not significantly increased its stimulus package. Expand trade-in and device upgrade policies.
Goldman Sachs said, “We believe the urgency of gradually easing policy to offset weak domestic demand is increasing; otherwise, the full-year growth target of ‘around 5%’ may be at risk given the high comparison base of GDP in the third quarter of last year.”
In the much anticipated The Third Plenary Session of the 18th CPC Central Committee At a policy meeting in mid-July, the Chinese government confirmed that China will strive to achieve an annual growth target of around 5%. They also emphasized the long-term goal of developing advanced technologies and other “new growth drivers.”
The statistics bureau said that in July, the output of new energy vehicles, integrated circuits and 3D printing equipment increased by more than 25% year-on-year.
Despite the overall improvement in retail sales, some signs suggest that retail sales remain weak.
Macquarie’s chief China economist Hu Weijun pointed out that restaurant revenue grew 3% year-on-year in July, the slowest growth rate since China ended its COVID-19 restrictions at the end of 2022.
He expects economic growth may improve in the fourth quarter as China increases fiscal and housing support.
The retail sales of home appliances and furniture, two categories that are greatly affected by the real estate market, fell slightly in July compared with the same period last year.
The real estate drag continues
Goldman Sachs analysts said official house price data released separately on Thursday showed that house prices fell 7.6% year-on-year in July after seasonal adjustment.
However, Goldman Sachs analysts, citing official and third-party data, said the figures refer to new home sales, while prices in the secondary market have fallen by 5% to 20% over the past year.
In the first seven months of this year, the sales area of newly built residential buildings fell by 18.6%, a slight improvement from the 19% drop in June this year.
Liu Aihua, a spokeswoman for the National Bureau of Statistics, said China’s real estate sector was still in a period of adjustment. She attributed the rise in urban unemployment in July to the graduation season, while acknowledging overall pressures on employment — including structural challenges in which companies could not find suitable workers.
The official urban unemployment rate for non-school students aged 16 to 24 was 13.2% in June. Data for July is expected in the coming days.
Liu also pointed out that bad weather had an impact on the July data, while the tourism industry Stay strong.
Rail travel between July 1 and August 12 increased by 6.1% compared to the same period last year. 605 million peopleAccording to China Railway Corporation, China’s main railway operator and state-owned enterprise, this figure is expected to slightly exceed The highest record of 830 million set last year Rail travel in July and August
Sales of sporting and recreational equipment recovered from a slump in June to increase 10.7% in July.
Online sales of physical goods grew 14% in July from a year earlier, according to CNBC calculations based on official data, reversing a period of decline or zero growth earlier this year.
Other July data released in the past two weeks show Consumer demand remains sluggish.
Chinese consumer prices Driven by rising pork prices, the core CPI rose 0.5% year-on-year in July, a larger-than-expected increase. Excluding food and energy prices, the core CPI rose 0.4%, down from 0.6% in the previous month.
The producer price index fell 0.8% in July from a year earlier. This decline was slightly lower than the expected 0.9% and matched the 0.8% drop in June.
Ms Liu said the decline in the producer price index is expected to narrow in the second half of the year, mainly due to a reduction in price drag factors.
July trade data shows Imports grew 7.2%, faster than expected Exports grew 7% compared with the same period last year, lower than expected.
Second-quarter GDP growth was a disappointing 4.7% year-on-year.
The challenges facing the Chinese economy come not only from the external environment, but also from structural transformation—”The pain that must be experienced “In the process of promoting high-quality development, we must take more proactive measures,” an official from China’s National Development and Reform Commission told reporters earlier this month, according to a CNBC translation of the Mandarin passage.
—CNBC’s Sonia Heng contributed to this report.
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