Key indicators of economic activity in China reached higher than expected levels in August. Both industrial production and retail sales grew. However, the real estate crisis dampens the economy.
Growth of industry and retail
August indicators of economic activity were better than expected in China in August. Industrial production rose 4.2 percent year-on-year, the fastest growth since March this year, China’s National Bureau of Statistics said. Analysts had expected industry growth of just 3.8 percent.
The development of retail sales also brought a similarly positive surprise. The Chinese took away 5.4 percent more goods from stores year-on-year than a year ago. In this case, too, it is the fastest growth rate in the last six months. In addition, retail sales exceeded analysts’ estimates by almost a factor of two. Experts point out that this is partly the effect of the low comparative base from last year.
Growth is slowing down in the real estate sector
However, China’s economy is troubled by the real estate sector, which is dealing with the crisis it got into a few months ago. Even because of this, the Chinese economy will only grow by about three percent this year, which will be the lowest rate since 1976, if we do not count the impact of the coronavirus pandemic in 2020.
