Output slows but economy keeps in good shape

Updated 2017-08-15 14:31:26 Shanghai Daily

Growth in China's industrial output, retail sales and fixed-asset investment slowed slightly in July with the economy remaining in good shape while supply-side reform deepened, the National Bureau of Statistics said yesterday.

Value-added industrial output, an important contribution to GDP, expanded 6.4 percent year on year in July, 1.2 percentage points slower than June, official data showed.

That missed market expectations of 7.1 percent but was faster than the 6 percent increase in July last year.

Retail sales rose 10.4 percent, 0.6 percentage points slower than June and 0.4 percentage points slower than market expectations.

Fixed-asset investment rose 8.3 percent year on year in the first seven months of 2017, compared with the 8.6 percent increase in the first half.

Market expectations were for 8.6 percent.

Investment by the private sector, which accounted for more than 60 percent of total FAI, rose 6.9 percent year on year.

Bureau spokesman Mao Shengyong said China's economic growth had been stable with quality improving as supply-side reforms deepen.

"Significant effects have been made in reducing capacity, improving supply of agriculture products, improving growth of the real economy, and cooling down the over-heated real estate market," Mao said.

"China's economy has been stable with a lasting trend of improvement, and the momentum has not weakened."

He said major economic indicators are nearly flat from the first half and significantly improved from last year.

More new jobs have been created, overall inflation is stable and market confidence is improving, Mao said.

"Some international organizations have lifted forecasts of China's growth for this year and next, indicating that China's economic improvement is sustained both from production and consumption perspectives," he added.

Australia and New Zealand Banking Group said the July slowdown in production and retail sales is likely to be temporary and it expected a rebound in the coming months.

"We believe that part of the slowdown stemmed from adverse weather conditions, whose effects will likely falter in the upcoming months," the bank said in a note.

"Online sales remained quite vibrant, rising 28.9 percent year on year in the month, and are likely to continue to offset the moderation in growth among traditional retailers."

Infrastructure investment continued to expand steadily in July, supporting overall fixed-asset investment, and the property market correction will be moderate as land sales remained strong, ANZ said.

Earlier data revealed stable expansion in manufacturing activity as the PMI in July stood at 51.4, remaining between 51 and 52 for the seventh consecutive month. China's foreign trade growth remained in double-digit growth.

Organizations, including the IMF and Asian Development Bank, raised their forecasts of China's economic growth for the year by 0.1-0.2 percentage points after China reported 6.9 percent GDP growth year on year for the second quarter.

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