A Chinese official tried Friday to reassure companies and investors that economic growth is stable despite unexpectedly weak July activity but acknowledged it faces pressure from lacklustre global demand.
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In the first 7 months of the year, fixed asset investment grew 8.1% from a year ago, below the 8.9% seen by the street and the 9% previously.
Those figures also missed expectations, with factory output expected to show 6.2 per cent growth and FAI 8.9 per cent growth.
David Qu, markets economist at ANZ in Shanghai, said while weak industrial activity is a sign of poor economic health, China is unlikely to use monetary policy to restore growth.
Growth in investment by state firms cooled to 21.8 percent in Jan-July, from 23.5 percent in Jan-June.
Real estate investment growth slowed to 5.3 percent but remains elevated.
Data reported Friday showed retail sales rose 10.2 per cent in July from a year earlier, down from June’s 10.6 per cent growth.
Private investment rose to 19.15 trillion yuan (about $2.88 trillion) in the first seven months, accounting for 61.4 percent of the country’s fixed-asset investment, according to the National Bureau of Statistics (NBS).
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“However, overall economic development kept performing in a proper range with steady pace, as a result of stable employment and prices, deepened supply-side structural reform and accumulated new impetus”, it said.
