China July: economy slows as factory output, retail sales weaken

China’s economy slowed again in July, with factory output and retail spending rising at the weakest paces of the year, underscoring a delicate balance for policymakers as domestic demand remains soft even as external risk from trade tensions lingers. Industrial production grew 5.7% year on year, a deceleration from June’s 6.8% and the slowest since November 2024. Retail sales advanced 3.7% year on year, the weakest figure this year and well below the previous month’s pace. Together, the readings point to a broad softening in the economy as policy makers seek to shore up growth amid uncertainties over the global trade environment and a fragile domestic economy.

Beyond these headline numbers, the data show slower growth across investment and prices. Fixed asset investment for the year to date expanded 1.6% in the first seven months, a trough for the year and below expectations that pointed toward a weak financing environment and cautious corporate posture. The producer price index fell 3.6% year on year, consistent with ongoing price deflation pressures at the factory level. On the demand side, conditions remained weak: new loans denominated in yuan contracted for the first time...