China reports weaker July activity but says economy stable

AP News
Posted: Aug 12, 2016 6:42 AM
China reports weaker July activity but says economy stable

BEIJING (AP) — Chinese factory output and other economic activity weakened in July, data showed Friday, but an official tried to reassure companies and investors growth is stable.

Growth in retail sales, factory output and investment all decelerated from June levels, according to the National Bureau of Statistics.

Private sector analysts have warned economic growth, which held steady at 6.7 percent for the three months ending in June, was showing signs of weakening heading into the current quarter.

The data indicate "the third quarter has started off on a weak footing," said Brian Jackson of IHS Markit in a report.

However, a spokesman for the statistics bureau said the weakening was due partly to summer flooding that caused 200 billion yuan ($35 billion) in losses and other one-time factors.

"The trend is good," said Sheng Laiyun at a news conference. "Even though economic growth dropped slightly, the economy is stable and making steady progress, and the steady trend toward improvement has not changed."

Sheng acknowledged China faces "downward pressure" from weak global demand as Beijing makes a marathon effort to nurture consumer-driven growth and reduce reliance on trade and investment.

July retail sales rose 10.2 percent in July from a year earlier, down from June's 10.6 percent growth. Factory output rose 6 percent, down from 6.2 percent in June.

Investment in factories, real estate and other fixed assets rose 2.1 percent in the seven months ending in July, down from the first half's 2.8 percent and 5.7 percent in the first quarter.

Customs data earlier showed July exports contracted by 4.4 percent from a year ago while imports plunged 12.5 percent.