The Chinese economy continues to slow

Sharing is Caring!

by Shaun Richards

The world can be a contradictory place. On the one hand China is likely to be having a wry smile at the failures of the western capitalist imperialists in the unfolding Afghanistan disaster. On the other it will be finding itself mulling the issues we looked at last Monday about the dangers of an economic slowdown. We had noted concern over consumption growth at such debt levels.

In July , the total retail sales of consumer goods was 3492.5 billion yuan, a year-on-year increase of 8.5% ; an increase of 7.2% over July 2019 , and the two-year average growth rate was 3.6% . Among them, the retail sales of consumer goods other than automobiles was 3,157.8 billion yuan, an increase of 9.7% . Excluding price factors, the total retail sales of consumer goods in July actually increased by 6.4% .  ( China Statistics )

Most places would consider a rise of 8.5% in nominal terms and 6.4% in real terms to be excellent but this is China. The numbers were around 3% lower than the market had been expecting and in answer to a question the spokesperson explained it like this.

Judging from the month of July, the growth of some consumer sectors and service industries has slowed down. The growth rate of total retail sales of consumer goods in some regions such as Henan, Jiangsu, and Hunan declined to varying degrees from the previous month, and the growth rate of some contact-type agglomeration industries, such as wholesale and retail, accommodation and catering, declined from the previous month.

So growth is admitted to be slowing and we see from the release that car sales are an area of concern. As to the year so far this is now the picture.

– months, total retail sales of social consumer goods 246829 yuan, up 20.7% , two-year average growth rate of 4.3% . Among them, the retail sales of consumer goods other than automobiles was 22,163.1 billion yuan, an increase of 20.2% .

Let us moving on after noting that the weather is being scapegoated here.

In July , extreme weather such as heavy rainfall and typhoons triggered dangerous disasters. The production and life of residents in the affected areas were severely affected. The local clustered epidemic caused by overseas imports spread to many provinces. The above factors and the base effect are superimposed, and the market sales growth rate has slowed down. In July , the total retail sales of consumer goods increased by 8.5% year-on-year , and the growth rate was 3.6 percentage points lower than that in June .

Industrial Production

The situation here was also one of slowing growth.

In July , the value added of the industrial enterprises above designated size increased by 6.4% year-on-year in real terms (the following growth rates of value added are all actual growth rates after deducting price factors), an increase of 11.5% over the same period in 2019 , and an average growth rate of 5.6% over the two years .

So a slowing in terms of annual growth rate and as a check not much as a monthly growth rate either.

From a month-on-month perspective, in July , the value-added of industrial enterprises above designated size increased by 0.30% over the previous month

There was a noticeable lack of growth in mining in the basic breakdown.

Divided into three categories, in July , the value-added of the mining industry increased by 0.6% year-on-year ; the manufacturing industry increased by 6.2% ; the electricity, heat, gas and water production and supply industries increased by 13.2% .

We got further breakdowns here.

the ferrous metal smelting and rolling processing industry decreased by 2.6% , and the non-ferrous metal smelting and processing industry increased by 2.6%…….Steel was 111 million tons, a year-on-year decrease of 6.6% ; cement was 205.82 million tons, a decrease of 6.5% ; 

@YuanTalks provided more of a breakdown.

#China‘s average daily crude #steel output stood at 2.8 mln tonnes in Jul, the lowest since Apr 2020, down 10.5% m/m, said National Bureau of Statistics. Daily output of pig iron fell 7% to 2.35 mln tonnes and daily output of steel products fell 11% to 3.58 mln tonnes.

Also the transport sector.

the automobile manufacturing industry decreased by 8.5% …..automobiles were 1.853 million, a decrease of 15.8% , of which , New energy vehicles were 289,000 , an increase of 162.7% ;

Fixed Asset Investment

See also  Armstrong: WOKE Culture is Destroying the Economy & our Nation

The set was completed by these numbers which also followed our theme.

From a month-on-month perspective, investment in fixed assets (excluding rural households) increased by 0.18% in July .

Meaning this also for the year so far.

– months, the national investment in fixed assets (excluding rural households) 302 533 billion yuan, up 10.3 percent ; more than 2019 Nian – growth in the month of 8.7% , two-year average growth of 4.3% . Among them, private investment in fixed assets was 17,477.3 billion yuan, a year-on-year increase of 13.4% .

House Prices

There was a question on this subject which elicited this response from the spokesperson.

Since the beginning of this year, with the economic recovery and the improvement of financing conditions, housing prices in some areas have risen significantly. In response, relevant departments have strengthened market regulation, implemented the main responsibility of the city, curbed unreasonable demand, and promoted the overall stability of the real estate market. In July, the increase in the sales price of commercial housing in 70 large and medium-sized cities continued to fall.

This was based on these numbers.

According to estimates, in July , the sales price of newly-built commercial residential buildings in first-tier cities rose by 0.4% month-on-month, and the increase was 0.3 percentage points lower than the previous month……Second-tier cities new commercial housing and second-hand housing sales price rose respectively 0.4% and 0.2% , increase over the previous month were down 0.1 and 0.2 percentage points.

Inflation Trends

See also  Stand Up Comedy Clip "Chinese Spy Balloon" by comedian Jim Breuer

The questions at the press conference led to this response.

Looking at the next stage, as the domestic economy recovers and the upward trend of international bulk commodity prices continues, industrial product prices will remain high for a period of time.

Also pointing out that the move was such it required official intervention.

In the face of rising prices, the government has introduced a series of measures to ensure supply and stabilize prices to promote price stability.

But even so it will continue.

However, due to the relatively large increase in upstream prices, which will adversely affect the production and operation of enterprises in the middle and downstream industries, in the next stage, we must continue to follow the central plan to increase supply and price stability, increase support for downstream industries, small and medium-sized enterprises, and maintain overall prices. stability.


The situation is unfolding as we feared with the economy of China both slowing and experiencing an inflationary phase. The former is concerning for the rest of the world via both its role as a leafing indicator and also via its size.

Next on the list comes what is happening with some equities as businesses fall out of official favour. Channel News Asia puts it like this.

China’s months-long regulatory crackdown has included big names in e-commerce, the gig economy, exam cramming and most recently online insurance. Close to US$1 trillion in market value has been wiped off China since February.

There has been considerable foreign investment in the Chinese stock market.

Having pumped in more than US$800 billion over the past five years, investors are not about to fold their bets that China will offer the biggest boost to global financial markets in the decades to come.

So the ramifications here will also reverberate around the world.

Also at 6.47 to the US Dollar the Yuan has got stronger over the past year by some 6.8%. Who is depreciating their currency now?


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.