In Jul, China’s industrial production and retail sales were broadly in line with consensus forecasts, but fixed asset investment unexpectedly slowed as property investment contraction worsened, UOB Group economist Ho Woei Chen notes.

Uneven growth in Jul with weak retail sales

“China’s industrial production and retail sales were broadly in line with consensus forecasts, but fixed asset investment unexpectedly slowed, and the surveyed jobless rates jumped higher in Jul. The housing market remained in a downtrend with prices, residential property sales value and real estate investment continuing to fall.”

“Although loans demand tends to be seasonally weaker in Jul, the sub-par data has further heightened concerns over a balance sheet recession in China where monetary policy easing loses its effectiveness to boost demand due to the weak sentiment.”