BEIJING – China’s industrial output grew 4.8 percent year-on-year in July, 1.5 percentage points lower than the growth recorded in the previous month, the National Bureau of Statistics said on Wednesday.
The figure – well below analysts’ forecasts of around 5.8 percent – is the slowest growth of this indicator since Feb. 2002 and shows the weakening domestic demand of the Asian country, locked in a trade dispute with the United States.
According to British consultancy firm Capital Economics, the data shows that the slowdown of the Chinese economy is deepening and that there is “more weakness on the horizon.”
“The broad-based slowdown in activity and spending last month suggests that, after holding up reasonably well in the first half of the year, economic growth now faces renewed downward pressure,” economist Julian Evans-Pritchard said in a report sent to subscribers.
“Even with fiscal policy turning more supportive, we think that construction activity will remain under pressure in the coming quarters as the recent boom in property development unwinds,” he added.
The NBS said that the industrial production is used to gauge the output of big companies, with an annual turnover of at least 20 million yuan (around $2.83 million).
In the first seven months of the year taken together, industrial output grew 5.8 percent year-on-year, the NBS added.
Manufacturing output increased 4.5 percent year-on-year in July, down from 6.2 percent in June, while production in the mining sector grew 6.6 percent year-on-year in July, 0.7 percent less than in June.
China’s fixed-asset investment grew 5.7 percent year-on-year in the first seven months of the year, 0.1 percentage points less than its growth between January-June.
The country’s retail sales of consumer goods increased 7.6 percent year-on-year in July, much lower than the 9.8 percent year-on-year growth it posted in the previous month.
Analysts attribute the fall to the decline in car sales last month.
In the first seven months of the year, the indicator grew 8.3 percent, 0.1 percentage point less than in the first six months.
Looking ahead, the Capital Economics expert points out that a devaluation of the yuan, China’s national currency “is unlikely to fully offset the increasing headwinds from US tariffs and cooling global demand.”
“We expect a further slowdown in economic activity over the coming year as a result,” he added.
On Tuesday, Washington announced that it will delay some of the tariffs on Chinese imports scheduled for Sept. 1 to Dec. 15, a move aimed at easing tensions ahead of the start of another round of bilateral negotiations next month.
The United States Trade Representative’s office said that tariffs of 10 percent on certain products out of $300 million worth of Chinese imports that were scheduled to come into effect on Sept. 1 would now be delayed until Dec. 15.
Meanwhile, Beijing decided last week to halt the purchase of US agricultural products and allowed its currency to fall against the dollar to its lowest level since 2008.