China’s industrial output and retail sales growth slow in July
Official figures showed weaker year-on-year growth in Chinese factory output and retail sales in July, increasing pressure on Beijing to support domestic demand.
In short
- Official figures showed weaker year-on-year growth in Chinese factory output and retail sales in July, increasing pressure on Beijing to support domestic demand.
China’s industrial output and retail sales growth both slowed in July, according to official figures released on Monday, August 17, adding to signs that weakness in the world’s second-largest economy extended beyond the second quarter.
Factory output increased 4.5% from a year earlier, down from 5.3% in June and below the 4.8% forecast in a Reuters poll. Retail sales rose 0.6% year on year, compared with 1% in June and a forecast of 1.5%.
China’s National Bureau of Statistics said extreme weather, including high temperatures and heavy rainfall, disrupted supply and demand. The figures follow annualised growth of 4.3% in the three months to June, below the government’s 4.5% to 5% target range and among the weakest quarterly readings since official quarterly GDP reporting began in the early 1990s.
Premier Li Qiang acknowledged that insufficient domestic demand remained a significant problem and said China should stabilise external demand and expand international economic and trade cooperation.
Some economists expect activity to strengthen later in 2026 if Beijing loosens fiscal policy. Capital Economics also said artificial-intelligence-related investment continued to support manufacturing and that recent typhoons may explain part of the broader weakness.
