China’s economic outlook brightened as recent data from the National Bureau of Statistics revealed better-than-expected growth in retail sales and industrial production in August. Retail sales surged by 4.6% compared to the same period last year, surpassing expectations of 3% growth. This growth was notably faster than the 2.5% year-on-year pace witnessed in July. Similarly, industrial production grew by 4.5% in August from a year ago, surpassing the 3.9% forecast and outpacing the 3.7% increase reported for July.
The data revealed significant growth in specific sectors, including a 5.4% rise in the value added of equipment manufacturing and a remarkable increase of over 70% in the output of solar cells and service robots year-on-year.
Despite the positive trend, fixed asset investment grew by 3.2% year-on-year in August on a year-to-date basis, slightly missing expectations for a 3.3% increase and decelerating from the 3.4% pace reported in July. This slowdown was attributed to a decline in real estate investment and a slowdown in infrastructure investment.
Fu Linghui, a spokesperson for the statistics bureau, mentioned that the real estate market is in a period of “adjustment” due to declines in sales and investment. However, recent policies are expected to support the recovery of the property sector.
While the private, non-state investment witnessed a decline of 0.7% in the first eight months of the year compared to the same period last year, reflecting weak sentiment about the future, economists believe it will take time for recent policies to take effect.
In an effort to bolster the economy, the People’s Bank of China recently announced a 25 basis point cut in the reserve requirement ratio, aiming to inject liquidity and support the real estate market and consumption. These measures are part of a comprehensive strategy to ensure a balanced recovery and sustain the economic momentum.