China: China's economy was struggling to gain steam in July as economic activity unexpectedly slowed. As a result, the central bank made a significant policy interest rate cut, and analysts urged more supportive policies to help the economy.
The National Bureau of Statistics (NBS) reported that a measure of activity in the industrial production, manufacturing, mining and utility sectors rose 3.8 percent in July compared to the same month last year. According to Wind, China's leading supplier of financial information services, this was lower than expected growth of 4.6% and slightly below 3.9% growth in June.
Retail sales rose 2.7% in July, down from an estimated 5.3% growth and down from 3.1% growth in June.
Real estate investment, a measure of spending on things like infrastructure, real estate, machinery and equipment, which Beijing has relied on to cushion the risk of a recession this year, grew 5.7% in the first seven months of the year. Hui. Down from 6.1% growth in the first six months.
According to Zhang Zhiwei, Chief Economist, Pinpoint Asset Management, "The COVID outbreak in many cities and deteriorating sentiment in the property market has resulted in a reduction in domestic demand." “The real estate market is witnessing trouble, as stalled construction in some projects cautions home buyers from buying new homes,”
In an effort to stimulate economic activity, China's central bank, the People's Bank of China (PBOC), slashed the key policy interest rate for one-year medium-term lending facilities by 10 basis points from 2.85 per cent to 2.75 per cent. The data was released on Monday. This was the first such reduction since mid-January.
Before these expectations spread to the rest of the economy, the government needs to act quickly to change them. While today's PBOC rate cut is a positive development, monetary policy may not be enough to resolve the issue on its own. According to Zhang, the zero-covid policy and the property sector policy should also be taken into account.
At a news conference on Monday, NBS spokesman Fu Linghui said that in order to keep key economic indicators "within reasonable limits," the government would focus on stabilizing employment and price levels while simultaneously boosting domestic demand.
According to Fu, the risks of stagnation in the global economy are increasing, and the restoration of the foundations of the domestic economy is still solid.
The unemployment rate in the urban survey, a faulty indicator of unemployment in China that does not include data on the country's millions of migrant workers, fell from 5.5% in June to 5.4% in July. From a record 19.3 percent in June, the unemployment rate for people aged 16 to 24 rose to 19.9 percent in July.
The strength and durability of that rebound could be affected by the ongoing coronavirus outbreak and lockdown in China.
At a conference that set the tone for the economy last month, China's top leadership defended its zero-Covid policy, while softening its language on achieving a full-year growth target of "about 5.5 percent".
China manipulates its population by instilling fear that everything they do is being watched
How Pelosi's visit to Taiwan sparked new round of electronic warfare between the US and China
50 million vacant apartments pose threat to China's already unstable real estate market