China’s factory output and retail sales growth slowed in July, missing expectations and underscoring the policy challenge of sustaining growth amid weak domestic demand and global headwinds.
- Industrial output rose 5.7% year-on-year, down from June’s 6.8% and the weakest since November 2024,
- while retail sales growth eased to 3.7% from 4.8%.
- Both trailed forecasts.
- Fixed asset investment increased just 1.6% in January–July versus expectations for 2.7%.
The data come as Beijing faces pressure from US trade policies, soft domestic consumption, and factory-gate deflation — with the producer price index falling 3.6% in July for a second straight month. Authorities have pledged measures to boost spending and curb excessive competition to meet their 2025 growth target of around 5%.
While a US–China trade truce has helped avert a sharper slowdown, analysts warn that tepid demand, global uncertainty, and recent extreme weather disruptions will weigh on momentum in coming quarters.
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