Retail sales, industrial output rise but new outbreak slows growth

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The sporadic outbreaks of COVID-19 and natural disasters such as floods hindered travel and held back consumption during the summer holiday.
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China's retail sales of consumer goods rose 2.5 percent in August from a year earlier, while value-added industrial output went up 5.3 percent year on year, both slowing from July due to new COVID-19 outbreaks, official data showed on Wednesday.

Retail sales registered the slowest growth since August 2020, a sharp drop from the 8.5 percent in July, according to the National Bureau of Statistics, putting the average two-year growth at 1.5 percent.

Notably, the catering industry saw revenue fall 4.5 percent in August compared with a year ago and contrasts with 14.3 percent growth in sales in July.

The sporadic outbreaks of COVID-19 and natural disasters such as floods hindered travel and held back consumption during the summer holiday, NBS spokesperson Fu Linghui said, adding that the high base factor also resulted in the steep year-on-year drop.

However, the cumulative growth for the last eight months showed that retail sales gained 18.1 percent year on year, which means consumption remained generally stable and the recovery trend was unchanged, said Fu.

The growth of industrial output in August narrowed from 6.4 percent in July, marking the weakest pace since July 2020.

High-tech manufacturing became a shining point in the industrial output as the country strived for industrial and technological upgrading. Last month, the output of the sector jumped 18.3 percent year on year, accelerating by 2.7 percentage points compared with the figure registered in July.

The output of new-energy vehicles, industrial robots and integrated circuits went up by 151.9 percent, 57.4 percent and 39.4 percent from a year earlier, respectively.

"In August, the national economy maintained the trend of recovery. However, we must be aware that the international environment is still complicated and severe," Fu said.

"At home, it has been felt that the sporadic outbreak of COVID-19 and natural disasters such as floods had caused an impact on the economy, and the foundation for the economic recovery still needs to be consolidated."

Fu is optimistic about future consumption activities, considering the upgrading demands of the large middle-income group of over 400 million people, the stable job market and the increasing profitability of enterprises.

China's job market remained generally stable, with the surveyed urban unemployment rate standing at 5.1 percent in August, unchanged from that in July.

China's fixed-asset investment went up 8.9 percent year on year in the first eight months of this year, with the average growth rate over the past two years standing at 4 percent. Investment in the manufacturing sector stood out, with a 15.7 percent yearly increase during the period.

Separate data on Wednesday showed China's property investment rose 0.3 percent in August, the slowest pace in 18 months, while growth in new home prices eased an eight-month low.

Authorities in China have stepped up efforts to rein in a red-hot property market, which rebounded sharply from last year's COVID-19 shock.

Responding to a question on property giant Evergrande's default risk, Fu said some real estate giants have encountered difficulties in their operations, and the impact on the industry still needs to be observed.

He added that the operation of the overall real estate market has been stable.

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