China’s industrial output growth slowed to its lowest level since 2002 in July as tariffs and trade tensions continue to weigh on the nation’s economy.
Industrial output increased 4.8% in July from the same period a year earlier, falling short of the 6% growth forecasted by analysts surveyed by Bloomberg.
Adding to the signals of a slowing economy in China, data also showed retail sales and investment spending expanded at slower-than-expected paces in July.
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Trade tensions and a slowing global economy are continuing to take a toll on China.
New data showed China’s industrial output growth sunk to a 17-year low in July. China’s industrial output rose 4.8% last month, coming up short of the 6% growth forecasted by analysts surveyed by Bloomberg.
Retail sales climbed 7.6%, missing analyst forecasts of 8.6%. The weak spending was pinned on a pullback in automotive sales, which posted strong numbers in June as dealers pushed sales ahead of new emission standards, according to research from Capital Economics.
Meanwhile, capital spending grew by 5.7% in July, narrowly missing analysts expectations of 5.8% growth. The slowdown was attributed to weakening infrastructure and property investment.
“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,” Julian Evans-Pritchard, a senior China economist at Capital Economics, said in a client note.
He continued: “A weaker renminbi is unlikely to fully offset the increasing headwinds from US tariffs and cooling global demand, and we expect a further slowdown in economic activity over the coming year as a result.”
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Over the course of last week, China let its currency’s daily price move below the psychologically significant level of 7 yuan per dollar, a breach that sparked speculation of a currency war breaking out between the US and China.
The move was largely seen as a buffer against any slowdown from US tariffs. A weaker yuan compared to other currencies would give China a leg up in global trade because its goods would become cheaper in other countries.
The Chinese government has attempted to jump-start its economy over the last few months with a variety of stimulus packages including tax cuts and lending incentives for banks.
The worrisome data also comes on the back of the Trump administration’s decision to delay some of September’s tariffs on Chinese goods. The announcement rallied US stocks on Tuesday and returned some hope of a trade deal being reached between China and the US.
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Source:: Business Insider