Retail sales saw a growth of 2.5% in July, compared to the same period of last year, falling short of the anticipated 4.5% rise as predicted by Reuters analysts. Industrial production registered an increase of 3.7% compared to the same time last year, which was a lower result than the 4.4% increase anticipated in the poll. Fixed asset investment saw an uptick of 3.4% for the first seven months of the year compared to the 12-month period before it, a figure below the 3.8% recorded in the Reuters survey.
In July, China's retail sales, industrial production, and fixed asset investment all failed to meet expectations, as reported by the National Bureau of Statistics. While the urban unemployment rate rose to 5.3%, the figure for youth unemployment was not included in the report, though it is known to have reached record highs recently. Retail sales increased by 2.5% year-on-year, lower than the anticipated 4.5%. Industrial production likewise grew by 3.7%, falling short of the predicted 4.4% climb. Fixed asset investment showed a 3.4% increase over the same period last year, substantially lower than the 3.8% estimated by Reuters.
The release of unemployment figures for individuals aged 16 to 24 did not happen as previously announced. This age group has endured unemployment much higher than the average rate, hitting a peak of 21.3% in June. In response, a representative of the National Bureau of Statistics indicated that the youth jobless number report is being suspended due to current economic and social situations, and a new approach is being reviewed. In the seven months up to July, real estate investment had gone down by 8.5% in comparison to the same period in the preceding year, a bigger drop than at the end of June.
The sale of physical products in online retail in the month of July grew 6.6% as per CNBC calculations of official data, which was a sharp deceleration from the prior months' double-digit increases. When isolating the retail sales, catering posted the highest progression of 15.8%, whereas sports and entertainment products marked a 2.6% expansion in comparison to the prior year. On the contrary, products such as autos and home appliances saw a decrease in their sales from July last year. Jewelry sales reported a 10% decrease in the same time frame. Official data revealed that this growth in retail sales was the weakest since a drop in December. The statistic bureau signaled an "intricate and complicated" condition both overseas and domestically, and a "lack of" domestic demand. The release suggested that macro policies should be adopted to manage the economy and to further boost domestic demand, foster assurance, and avert risks.
Following a rebound at the start of the year, China is now coming to terms with its deep-rooted difficulties and diminished global demand for its merchandise. Exports dropped by 14.5% from the year earlier in July after a 12.4% decrease in June. Data from an official survey showed that manufacturing activity contracted for the fourth consecutive month in July. Apart from vacationers, domestic requirement has been lackluster. Imports dropped by 12.4% year-over-year in July and have been mostly diminishing month-to-month when compared to the figures from 2022. Furthermore, the consumer price index declined in July, adding to growing concerns about deflation.
The economy is being negatively affected by a continued dip in the huge real estate market. Recently, developer Country Garden has come to the brink of insolvency, putting the property sector in the spotlight once more. At the end of July, high ranking officials showed a change from suppressing real estate speculation.Multiple plans to increase consumer expenditure, private sector investment, and foreign investment have been made public. Even though further stimulus is being cautiously considered, particularly concerning real estate, it is still being deliberated.
CNBC has recently published a number of articles about China. Goldman Sachs has identified two of their top buy-rated picks that are projected to perform well. On the other hand, Morgan Stanley has also released six of its recommended stocks in the area, with one chipmaker they believe has the potential to climb 80% in the near future. Current consumer trends in China have been highlighted in these pieces, and measures that could increase investment in the country. The chip wars have also been discussed, and a certain Chinese stock has experienced a notable surge of 30% in a short span of five days.
Goldman Sachs has identified Chinese stocks that are poised for a bounce, with two of them making their list of top buy-rated picks. Morgan Stanley has six equity selections from the country, including a chip maker that they think has the potential to surge 80%. Consumers in China have been showing a lot of resilience when it comes to their buying habits, and the stocks which have been benefiting from this have been reported. The chip market is becoming increasingly competitive; one particular Chinese stock has seen an increase of 30% in only five days.
Ting Lu, Nomura's Chief China Economist, observed in a Monday note that Beijing has done certain things to lessen the strain in the property sector, but asserted that they have been too slow and too little. Lu believes that Beijing will eventually have to take additional measures to stop the downward trend. Recent data suggests that industrial activity in July was strongest since March, while core CPI rose faster in July than in any month since January. This is a developing story; please check back for updates.
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