China’s economic growth decelerated in July, following strong growth in the first half of the year, suggesting the world’s second-largest economy is losing momentum, according to economic data released on August 14. Official reports on industrial production, retail sales and fixed-asset investments showed signs of a slowdown in July against the previous month, falling below market expectations.
The economic slowdown comes at a time when the Chinese Government is focusing on the country’s stability amid a debt crisis and a growing bubble in the property market, in the run up to the National Congress of the Communist Party in the coming autumn, where Xi Jinping is expected to be re-elected as the party leader. Industrial output grew 6.4 percent year-on-year in July, down from 7.6 percent in June, while the pace of retail sales decelerated to 10.4 percent from 11 percent the previous month, according to the figures reported by Bloomberg.
The economic slowdown comes at a time when the Chinese Government is focusing on the country’s stability amid a debt crisis and a growing bubble in the property market
Meanwhile, fixed-asset investment in urban areas, a measure of capital spending that includes roads, properties and factories, rose 8.3 percent in the first seven months of 2017 in comparison with the same period last year. All three indicators released on August 14 fell short of analyst estimates.
Speaking to The Wall Street Journal, Oxford Economics analyst Louis Kujis said: “Despite the strong first half, China’s economic growth will cool in the second half of this year on less accommodative monetary policy and slower growth in real estate.”
China’s economy grew 6.9 percent in the second quarter, above the official target, but measures taken by the government to curb speculation in the housing market and curb national debt impacted growth. Forecasts now project 6.5 percent growth in 2017.