China factory output, retail sales growth slow significantly in August

BEIJING (REUTERS) – China’s industrial output rose 5.3 per cent last month from a year earlier, the weakest pace since July last year, while growth of retail sales also slowed significantly and missed expectations, official data showed on Wednesday (Sept 15).

The growth of factory output was slower than a 5.8 per cent year-on-year increase tipped by a Reuters poll of analysts, and compared with a 6.4 per cent increase in July.

Covid-19 controls, prolonged semiconductor shortages and curbs on high-polluting industries have disrupted activity in the world’s second-biggest economy.

China’s vehicle sales slid in July for a third consecutive month, partly driven by the global auto chip shortages. In a bid to provide some relief for the sector, China’s market regulator on Friday fined three auto chip sales companies for driving up prices.

Some steel producers in China’s Jiangsu, Fujian and Yunnan provinces were told by the government to cut production as the country aims to curb industrial pollution.

Growth in retail sales took a big hit from rising local Covid-19 cases. Sales only rose 2.5 per cent last month from a year ago, much lower than the forecast 7 per cent rise and marking the slowest clip since August last year.

It compared with an 8.5 per cent uptick in July.

The Chinese economy made a remarkably strong revival from last year’s coronavirus-led slump, but momentum has slowed over the past few months as businesses grapple with sporadic Covid-19 outbreaks, supply bottlenecks and high raw materials.

Social restrictions due to the Covid-19 Delta variant in several provinces have hit the catering, transportation, accommodation and entertainment industries.

China’s services activity slumped into contraction last month, a private sector survey showed, as restrictions to curb the Covid-19 virus threatened to derail the economic recovery.

KFC operator Yum China Holdings, said on Tuesday its adjusted operating profit would take a 50 per cent to 60 per cent hit in the third quarter as the spread of the Delta variant in China led to restaurant closures and “sharply reduced sales”.

Fixed asset investment grew 8.9 per cent in January-August from the same period a year ago, compared with a 9 per cent rise tipped by a Reuters poll and a 10.3 per cent increase in January-July.

More on this topic

Join ST’s Telegram channel here and get the latest breaking news delivered to you.

Source: Read Full Article