Explainer | Where now for China after economy lost momentum ‘across the board’ in August?
China’s economic data in August largely disappointed, pointing to difficulties in meeting Beijing’s annual growth target
China released key economic data for August on Saturday, including key retail sales and investment figures, having a day earlier published new bank lending figures.
1. Household spending remains cautious as retail sales growth dips
The reading fell short of the 2.68 per cent projected by Chinese financial data provider Wind and barely managed to avoid reaching a new post-pandemic low, said Lynn Song, chief economist for Greater China at ING.
“The data continues to paint a clear picture of cautious household spending,” said Song, who added that discretionary consumption categories – including gold, jewellery, cars and cosmetics – were hit particularly hard in August.
2. Property investment continues to drag
Property investment in China – a figure that has sagged amid persistent uncertainties in the real estate market – dropped by 10.2 per cent, year on year, in the first eight months of the year, matching the fall recorded in the January-July period.
“The main drag on growth still stems from the property sector,” said analysts at HSBC.
3. Fixed-asset investment growth falls to lowest level this year
China’s overall fixed-asset investment, which includes major items such as infrastructure construction, manufacturing and property spending, rose by 3.4 per cent in the first eight months of the year, compared with a rise of 3.6 per cent in the first seven months.
