China’s underwhelming economic data dampens hope of economic recovery

Chinese retail sales rebounded in July while industrial production growth slowed, official data showed Thursday, highlighting an uneven recovery in the world’s second-largest economy.

More than a year and a half after the lifting of stringent Covid-19 measures, the much-anticipated post-pandemic recovery has been brief and less robust than expected, while a property crisis and high unemployment have weighed on investor confidence.

In July, retail sales — a key indicator of consumer spending — grew 2.7 percent year-on-year, rebounding from June’s 2.0 percent increase, according to the National Bureau of Statistics (NBS).

The performance narrowly exceeded the expectations of analysts surveyed by Bloomberg, who had predicted a 2.6 percent increase.

However, industrial production growth slowed, with July’s 5.1 percent expansion inching down from 5.3 percent in June and short of the 5.2 percent forecast in the Bloomberg survey.

This marks its weakest growth since March.

Some sectors like the services industry in China have seen some recovery, driven largely by domestic tourism.

Significant hurdles remain for other sectors including the real estate industry, with many housing developers on the brink of bankruptcy, discouraging Chinese from investing in property.

International challenges are also mounting, with the European Union and the United States increasingly imposing trade barriers to protect their markets from low-cost Chinese products and perceived unfair competition.
Meanwhile, the unemployment rate rose to 5.2 percent in July, from 5 percent in June.

However, the NBS figures paint an incomplete picture of China’s overall employment situation, as they only take urban areas into account.

The unemployment rate for people aged 16 to 24 was 13.2 percent in June, according to a new calculation that now excludes students. July’s figures have not yet been released.

It had skyrocketed to a record 21.3 percent last year, before authorities suspended the publication of figures for several months, citing a need to review methodology. (BSS/AFP)