China’s economy lost momentum in July as industrial output, retail sales, and housing prices weakened, adding to concerns over ongoing trade tensions with the United States.
Fresh government data showed factory output growth slowed to 5.7% from 6.8% in June, while retail sales rose just 3.7%, the weakest in seven months. Property prices in major cities fell 1.1%, extending a prolonged real estate slump that began alongside the COVID-19 pandemic, wiping out millions of jobs and eroding household wealth.
The housing market downturn, coupled with declining property investment, down 12% in the first seven months of the year has been a major drag on consumer spending. Most Chinese families hold their wealth in real estate, and weak sales persist despite government measures to revive demand.
Trade data offered mixed signals. Exports surged 7.2% year-on-year in July, and imports rose at their fastest pace in a year as companies rushed to benefit from a temporary tariff truce with Washington. However, analysts note this growth was partly due to a low comparison base, with manufacturers slowing investments and hiring while seeking new markets in Southeast Asia, Africa, and beyond to offset reduced U.S. demand.
Unemployment rose to 5.2% as fresh graduates entered the job market. Consumer prices gained 0.4% month-on-month, but wholesale prices fell 3.6% year-on-year, reflecting subdued demand.
With uncertainty over tariffs still unresolved and domestic weaknesses in housing, consumption, and manufacturing, policymakers face mounting pressure to stabilise the world’s second-largest economy.
