China’s retail sales and industrial production beat expectations in August


August was marked by extremely high temperatures in parts of China, leading to temporary power rationing in some regions. Pictured here on August 24, 2022, the central city of Chongqing’s skyline has been partially turned off to conserve energy during the heat wave.

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BEIJING — China on Friday reported data showing a pick-up in August growth from the previous month. The data also exceeded expectations across the board.

Retail sales rose 5.4% in August from a year ago, surpassing Reuters’ forecast of 3.5% growth. On-trade sales rose 8.4% in August from a year ago, while auto and food sales also grew significantly. That helped retail sales for the year through August grow 0.5% from a year ago. Cosmetics and home furnishings were among the few categories that saw sales decline in August from a year ago.

Online sales of physical goods rose 12.8% in August from a year ago, faster than the 10.1% growth in July, according to CNBC calculations of official data.

Industrial production rose 4.2% in August from a year earlier, better than the 3.8% increase estimated according to a Reuters analyst poll.

Fixed asset investment for the first eight months of the year was up 5.8%, ahead of Reuters’ forecast of 5.5%. Manufacturing investment grew the most, up 10% from the same period a year ago. Investment in infrastructure grew slightly faster than in July, year on year.

Real estate investment for the year continued to decline from August, down 7.4% from the same period last year, compared to a 6.4% decline for the year from July.

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The unemployment rate for young people aged 16 to 24 fell to 18.7% in August. It remained much higher than the overall urban unemployment rate, which stood at 5.3% in August, a slight decrease from the previous month.

“Overall, the national economy has withstood the impact of multiple unexpected factors and supported the momentum of recovery and growth with key indicators showing positive changes,” the National Bureau of Statistics said in a press release. “However, we must be aware that the international environment is still complicated and severe and the foundations for domestic economic recovery are not solid.”

China’s economy continued to be under pressure, partly as a result of Covid controls, which notably stranded tens of thousands of tourists on the tropical island of Hainan in August.

The summer months were also marked by extremely high temperatures in parts of China, leading to temporary power rationing in some regions.

Export growth slowed to 7.1% year-on-year in August, indicating that the driver of Chinese growth could fade as global demand falters. Domestic demand remained weak and imports rose by only 0.3% year-on-year.

China’s consumer price index fell from a two-year high to rise 2.5% year-on-year in August. But excluding food and energy, the index rose only 0.8%, again on the back of weak demand.

The slump of the massive real estate sector has also weighed on demand. A few weeks earlier, Chinese developer Country Garden described the real estate market as “swifting into a severe depression”.

Correction: This story has been updated to reflect infrastructure investment grew faster in August than in July and real estate investment fell 6.4% in the first seven months of the year from a year ago.

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