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July Data for China’s Economy Disappoints


August, 18 2017
watermark Economic news

The gross domestic product in China is rising at a stronger pace as it gained 6.9% year over year during the second quarter this year, which is similar to Q1. Chinese economic data showed strong statistics during the first half of 2017, however, the data released on July revealed signs that GDP is slowly fading which is generally expected.

This is one of the main reason that triggered fears regarding the possible financial disaster due to the arising issue of China about debts. The debt situation in the country led the government to engage with the tightening monetary policy by means of controlling further charges.

Moreover, China’s industrial production came in at 6.4% YoY in July versus 7.6% in June but failed to meet economist’s forecast of 7.1%. Retail sales gained 10.4% YoY last month against 11% result in June, remains lower than the expectation of economists at 10.8%.

On the other hand, the infrastructure and property investment earned 8.3% YoY during the month of January to July but missed that projected 8.6% growth.

Although the issue of China’s debt requires narrowing of policy, the decline of major indicators has the potential to restrain the administration to implement tightening monetary policy aggressively for the sake of GDP stabilization.

While the inflation figures of the second biggest economy in the world reported a slow down on an annualized basis. The data of Consumer Price Index (CPI) and Producer Price Index (PPI) were issued on August 9, 2017. The CPI was up to 1.4% in July but fall short to meet the target of 3%, as the PPI acquire 5.5% due to looming commodity prices linked with a strong demand. Nevertheless, these figures did not coincide with Bloomberg’s forecasts of 1.5% in CPI and 5.6% for the PPI.

Amid the negative statistics presented, the country’s manufacturing activity demonstrated slight improvement in July 2017 as the PMI jumped to 51.1 versus 50.4 in June this year. In spite of the slackening figures, China appeared to gain traction with 6.5% growth target for the current year.


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