July retail sales and industrial output grew less than expected.
China’s retail sales and industrial output in July missed analysts’ estimates, according to government data published on Friday, signaling continued weakness in the economy.
The weak indicators underscore the impact of uncertainty stemming from U.S. tariffs, which compounds the structural weaknesses that have plagued China’s economy in recent years.
Last month, retail sales rose 3.7% year-on-year, missing analysts’ estimates for a 4.6% growth in a Reuters poll and slowing from June’s 4.8% growth.
Industrial output rose 5.7%, its weakest level since November last year, and weaker than analysts’ expectations for a 5.9% rise.
Meanwhile, fixed-asset investment grew 1.6% in the January to July period, also below economists’ forecasts for a 2.7% increase and a slowdown.
China’s National Bureau of Statistics, which published the data, noted that the weak numbers are due to “ongoing challenges from the complex and unpredictable external environment” as well as extreme weather.
High temperatures, heavy rains, and flooding affected several parts of the country last month, curbing a range of business activities.
In recent years, private investment and consumer spending have broadly fallen in the country, with particularly acute weakness in the property market.
In response, China has cut interest rates, recapitalized local banks, and implemented several programs, which also include monetary benefits, to spur the local industry and household consumption.
On the tariffs front, the U.S. and China have arrived at a temporary truce and lowered their soon-to-be-implemented tariff duties, pending a final agreement. Earlier this week, Beijing and Washington announced another 90-day extension, until mid-November, for implementation of tariffs.
So far this year, iShares MSCI China ETF (MCHI), which tracks large and mid-cap Chinese stocks listed in the U.S., and tech-focused KraneShares CSI China Internet ETF (KWEB) have risen around 27%.
The retail sentiment for both the funds on Stocktwits was ‘neutral.’
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