BEIJING: China's retail sales growth slowed sharply in July, government statistics showed Friday, missing expectations in a disappointing sign for the world's second-largest economy as authorities look to consumer demand to push growth.
Retail sales rose 10.2 percent in the month, the National Bureau of Statistics (NBS) said, a marked slowdown from June's 10.6 percent increase and below the median forecast of 10.5 percent in a Bloomberg News poll of economists.
Beijing is looking to retool the economy from a reliance on investment spending and exports to one driven more by consumer demand, but the transition is proving bumpy and gross domestic product growth is slowing.
China is a key driver of the world economy but grew at its slowest rate in a quarter of a century last year, and has decelerated further since then.
Industrial output in the Asian giant rose 6.0 percent in July over the year before, the NBS said, while fixed asset investment (FAI), a gauge of infrastructure spending, rose 8.1 percent in the first seven months of the year.
Those figures also missed expectations of 6.2 percent and 8.9 percent respectively.
Analysts were disappointed. Zhao Yang of Nomura called the figures an "across-the-board slowdown" that showed more weakness than expected. The investment figures were consistent with a deep contraction in imports that "points to sluggish domestic investment demand".
"Overall, we think growth momentum continued to lose steam, which was possibly exaggerated by the flooding," he added.
Looking ahead, factory output will face further downward pressures due to efforts to cut overcapacity, analysts with ANZ Research said in a note.
Industrial production "may further dampen" this quarter, they added, as a result of flooding around the Yangtze River and suspended factory production in Zhejiang province, one of China's most developed areas, due to a forthcoming G20 summit in Hangzhou.
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