Wei Li at CBA also expects further easing, noting, “China’s fiscal deficit has reached 4% of gross domestic product, against an official target of 3.0% for 2016, suggesting it is hard for the Chinese government to increase fiscal stimulus”.
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For the first seven months of 2016, production was down 5.1 percent versus the same period previous year to 118.35 million tonnes, or about 4.06 million bpd.
Analysts had forecasted they would rise 10.5 percent on an annual basis after a rise of 10.6 percent the prior month. Economists had forecast 8.9 percent growth.
Private sector investment, a recent policy focus, continued to deteriorate despite Beijing’s efforts to revitalise the impetus of private capital. Analysts had expected it to rise 8.8 per cent.
“Most private companies have to rely on their own sources of funding”, Sheng told reporters at a press conference after the data.
Growth held steady at 6.7 percent for the three months ending in July, though that was the weakest quarterly performance since the aftermath of the 2008 global crisis.
“Amid a slower growth investment, the structure of the investment is becoming more reasonable”. Private investment accounts for about 60 per cent of overall investment in China.
China’s retail sales rose 10.2 per cent year-on-year in July, government statistics showed Friday, missing expectations in a disappointing sign for growth in the Asian giant.
“People are anxious about a lack of solid demand over the next few years so they aren’t really investing, especially in capex, which is the driving factor of the slowing investment”, said Zhou Hao, Senior Emerging Markets Economist at Commerzbank in Singapore.
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Weakness in factory output, imports and other activity was due partly to summer flooding that caused 200 billion yuan ($A45.45 billion) in losses and other one-time factors, said Sheng Laiyun, spokesman for the National Bureau of Statistics. E-commerce again showed its strength, as online sales increased 27.5 per cent in the January – July period.
