China retail sales slow to 0.6%, factory output to 4.5%

China's retail sales grew 0.6 percent year on year in July and industrial production grew 4.5 percent, official data showed Monday, with both figures slowing from June and falling short of forecasts in a Bloomberg survey.

The National Bureau of Statistics said retail sales growth was down from 1.0 percent in June and below the 1.5 percent forecast in the Bloomberg survey. Industrial production growth slowed from 5.3 percent in June and was below the survey forecast of 5.0 percent.

Fixed-asset investment in January-July fell 6.7 percent from a year earlier, the NBS said.

NBS spokesman Fu Linghui said international geopolitical conflicts persisted and the global energy market was marked by instability and uncertainty. He also cited severe weather in some Chinese regions last month, while saying authorities had actively addressed internal and external risks and challenges.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the weak data showed further downside risks that required a more effective policy response. He said the Politburo meeting in late July had promised stronger fiscal spending, but implementation and transmission would likely take time.

Chinese leaders have faced weak domestic spending since the end of the Covid-19 pandemic, even as exports and some high-tech sectors have grown. Beijing is targeting national growth of 4.5 to 5.0 percent this year, the lowest official goal in decades, but the economy fell short of that in the second quarter.

Trade data for July released earlier this month showed exports and imports soaring, boosted by increased overseas demand for AI-related technology products. The export surge has helped China's manufacturing sector during the prolonged slump in domestic spending.