China Economic Data Disappoints

(RTTNews) - China's industrial production and retail sales registered weaker-than-expected growth in July, strengthening calls for further policy support to rebalance the economy towards consumption.

Industrial production grew 5.7 percent in July from a year ago, following June's 6.8 percent increase, the National Bureau of Statistics reported Friday. Output was forecast to climb 5.9 percent.

Likewise, retail sales growth eased more-than-expected to 3.7 percent from 4.8 percent in June. Economists were expecting a 4.6 percent increase. During January to July period, fixed asset investment increased 1.6 percent from the last year, weaker than the 2.8 percent rise in the first six months. This was also slower than the forecast of 2.7 percent. At the same time, property investment slumped 12 percent.

In July, the urban unemployment rate rose to 5.2 percent from 5.0 percent in June. The second largest economy expanded 5.2 percent in the second quarter, underpinned by industrial production and robust exports, thanks to the frontloading of orders by US manufacturers. While Beijing aims to achieve around 5 percent economic growth this year, the International Monetary Fund forecast 4.8 percent expansion.

Chinese policymakers continue to adopt a flexible and supportive policy stance, ING economist Lynn Song said.

With more support measures likely to be announced in the coming months, China will remain on track to reach its target growth in 2025, Song added.

Earlier this year, the US administration imposed 145 percent tariffs on China and the latter retaliated with 125 percent levies on US goods.

However, after a round of talks held in Geneva in May, the US lowered the tariffs on Chinese goods to 30 percent and China reduced levies on US imports to 10 percent for three months.

This week, China and the US extended tariff truce to another 90 days until mid-November. The extension will provide more time for both parties for further negotiations.