Industrial output slows but still reasonable

Growth of 4.8 percent year on year in July reverses the recovery in June but overall development remains steady, according to the National Bureau of Statistics.

China’s industrial output grew at a slower pace of 4.8 percent year on year in July, reversing the recovery in June, data from the National Bureau of Statistics showed on Wednesday.

Despite fluctuations in industrial output growth, the country's economy is continuing to operate within a reasonable range and maintain overall steady development, the bureau said.

Value-added industrial production grew 4.8 percent in July from a year earlier, 1.5 percentage points lower than that recorded in June. It was the weakest pace since February 2002.

In the January-July period, major industrial enterprises posted added value increasing by 5.8 percent from the same period last year, 0.2 percentage points slower than the first half.

The mining industry saw a 6.6 percent year-on-year growth in value-added output, manufacturing rose 4.5 percent, and the electricity, heat, gas, water production and supply sectors advanced by 6.9 percent.

Output of the high-technology industry grew 6.6 percent, 1.8 percentage points faster than overall industrial output growth, indicating the continuous optimization of the industrial structure, the bureau said.

The service sector expanded 6.3 percent in July from a year earlier, while for the January-July period it grew 7.1 percent year on year to outpace the increase in the secondary industry by 1.3 percentage points, according to the bureau.

Among them, information transmission, software and information technology services grew by 23.2 percent, and the leasing and business services industry rose 8.1 percent, both maintaining relatively fast growth. 

Headline retail sales growth in nominal terms cooled to 7.6 percent year on year in July from a high of 9.8 percent in June, mainly dragged down by tumbling auto sales, bureau spokeswoman Liu Aihua said.

The retail sales figure for consumer products, excluding autos, was 8.8 percent last month, generally flat from the previous month.

Auto sales dropped by 2.6 percent year on year, reversing the previous month's 17.2 percent growth as some regions adopted the stricter China VI emission standards on July 1 and some car dealers had promotions to clear out models built in accordance with China V emission standards in June which sharply lifted June sales.

The drop is consistent with data reported by the China Passenger Car Association showing growth of passenger car sales (by volume) slumped to negative 5 percent in July from 4.9 percent in June.

Sales growth of oil and oil products fell into negative territory in July to drop by 1.1 percent year on year compared with the 3.5 percent rise in June, more significantly than the slight moderation in year-on-year oil price inflation (Brent oil price edged down to shrink 13.7 percent from a year earlier in July following the 13.6 percent drop in June), according to Nomura.

However, retail sales in products related to consumer upgrade, the catering industry, food and groceries, as well as online retail all extended rapid growth in July, Liu said.

Fixed asset investment growth softened in July, with headline FAI growth moderating to 5.7 percent year on year in January-July from 5.8 percent in the first half. 

"The July’s fall in FAI growth was mainly driven by weaker property and infrastructure investment growth," said Lu Ting, chief China economist of Nomura.

Infrastructure investment grew 2.7 percent in July, slower than the 3.9 percent rise in June, while manufacturing investment expanded at the faster pace of 4.7 percent year on year compared with the previous 3.8 percent. 

China’s foreign trade added up to 2.74 trillion yuan (US$390 billion), an increase of 5.7 percent year on year which was 2.6 percent faster than June. Export growth accelerated to post a 10.3 percent year-on-year growth in July from the 6 percent rise in June, while imports rebounded 0.4 percent, reversing the 0.4 percent drop in June. 

In the first seven months, 8.67 million new urban jobs were created, achieving 79 percent of the annual target for the year. The urban surveyed unemployment rate in 31 major cities was 5.2 percent in July, up slightly by 0.2 percentage points from a month earlier.

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