China’s Investment and Consumption Both Weaken in August; Industrial Production Alone Beats Expectations

[Financial News] China’s investment slowdown deepened in August, while growth in retail sales also weakened further. Industrial production, however, performed better than expected. Chinese authorities have warned of an imbalance between severely weak domestic demand and excess supply.
According to data released by the National Bureau of Statistics of China (NBS) on the 15th, retail sales rose just 0.4% year on year in August. The figure fell short of both the previous month’s 0.6% and the 0.8% forecast by economists. Fixed-asset investment declined 7.2% year on year in the January-August period, widening the drop from 6.7% in January-July. The urban unemployment rate also rose to 5.3% in August from 5.2% in July.
By contrast, industrial production increased 5.2% year on year in August, significantly exceeding the previous month’s 4.5% and the market forecast of 4.8%. The increase was supported by Chinese exports, as global demand for semiconductors and tech hardware benefited from the artificial intelligence (AI) boom.
The NBS emphasized, "The imbalance between strong supply and weak demand is worsening," adding, "We need to strengthen macroeconomic policy coordination and boost domestic demand."
CNBC reported that China’s second-quarter economic growth remained at 4.3%, its lowest level in three years, raising concerns about the country’s ability to meet its annual target of 4.5% to 5.0%. Markets are watching to see whether authorities will introduce a large-scale fiscal support package ahead of the National Day of the People’s Republic of China holiday in October.
[email protected] Yoon Jae-jun Reporter