China economy stalls as factory output, retail sales growth slow

‘Recovery uneven on sporadic COVID outbreaks, weather’

August 17, 2021 12:23 am | Updated 12:23 am IST - BEIJING

This photo taken on August 16, 2021 shows a worker producing washing machine parts at a factory in Nanjing, in China's eastern Jiangsu province. (Photo by STR / AFP) / China OUT

This photo taken on August 16, 2021 shows a worker producing washing machine parts at a factory in Nanjing, in China's eastern Jiangsu province. (Photo by STR / AFP) / China OUT

China’s factory output and retail sales growth slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted business operations, adding to signs the economic recovery is losing momentum.

Industrial production in the world’s second-largest economy increased 6.4% year-on-year in July, data from the National Bureau of Statistics (NBS) showed on Monday. Analysts had expected output to rise 7.8% after growing 8.3% in June.

Retail sales increased 8.5% in July from a year earlier, far lower than the forecast 11.5% rise and June’s 12.1% uptick. China’s economy has rebounded to its pre-pandemic growth levels, but the expansion is losing steam as businesses grapple with higher costs and supply bottlenecks. New COVID-19 infections in July also led to fresh restrictions, disrupting the country’s factory output already hit by severe weather this summer.

Asian share markets slipped on Monday after the data showed a surprisingly sharp slowdown in the engine of global growth.

Fu Linghui, an NBS spokesperson, said at a briefing on Monday that China’s recovery remains uneven due to sporadic COVID-19 outbreaks and natural disasters.

“The domestic economic recovery still faces many challenges, and constraints on production increased,” said Mr. Fu.

Top News Today

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.