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Chinese industrial production grows at slowest in 17 years; retail sales miss

Chinese industrial production grew in July at the slowest rate since February 2002, while retail sales expansion missed expectations, according to data from the country's National Statistical Bureau.

Industrial production climbed 4.8% year over year in July, down from the 6.3% growth recorded in June and missing the consensus estimate of economists polled by Econoday of a 5.7% growth, NBS data showed. Annual growth in the seven months ending July came in at 5.8%, compared with the 6.0% climb recorded in the first half of 2019.

Meanwhile, the annual growth of retail sales fell to 7.6% in July from 9.8% in the previous month and missed the Econoday consensus estimate of an 8.5% rise. Annual growth for the first seven months of 2019 came in at 8.3%, down from 8.4% in the six months ending June, with the increase in online sales slowing to 16.8% from 17.8% in the first half.

The economic data for July "suggests that, after holding up reasonably well in the first half of the year, economic growth now faces renewed downward pressure," said Julian Evans-Pritchard, senior China economist at Capital Economics.

"A weaker renminbi is unlikely to fully offset the increasing headwinds from U.S. tariffs and cooling global demand, and we expect a further slowdown in economic activity over the coming year as a result," Evans-Pritchard added.

Fixed asset investment, excluding that by rural households, grew 5.7% year over year to 34.889 trillion yuan in the first seven months of 2019, down from the 5.8% rise recorded in the January-to-June period. The reading was in line with the Econoday consensus estimate. Investment in high-tech manufacturing rose 11.1%, while investment in high-tech services climbed 11.9%.

The unemployment rate in urban areas rose 0.2 percentage points to 5.3% in July.

China recently reported a decline in producer prices for the first time in three years in July. Manufacturing activity also contracted during the period.

As of Aug. 13, US$1 was equivalent to 7.05 Chinese yuan.