China: Economy Making Steady Progress Despite Weak Data
A Chinese official sought Friday to reassure companies and investors that the growth in the world's second-largest economy is stable despite unexpectedly weak July activity, but acknowledged pressure from lackluster global demand. Weakness in factory output, imports and other activity was due partly to summer flooding that caused 200 billion yuan ($35 billion) in losses and other one-time factors, said Sheng Laiyun, spokesman for the National Bureau of Statistics. The poor performance prompted suggestions the Chinese economy might be cooling despite repeated government stimulus efforts. Growth held steady at 6.7 percent for the three months ending in June, though that was the weakest quarterly performance since the aftermath of the 2008 global crisis. “The trend is good,” Sheng told 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, however, that 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. Data reported Friday showed 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 in July over a year ago, 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.