China’s economy lost momentum in July, with growth faltering across the board. Retail sales rose 3.7% from a year ago, but missed analysts’ estimates for a 4.6% growth. Industrial output also slowed, rising only 5.7% from last year, its weakest level since November.
The slowdown is attributed to weak domestic demand and efforts by Beijing to curb excess capacity. The government intensified scrutiny on excessive production in sectors like steel and coal to reduce competition and deflation. Fixed-asset investment expanded only 1.6% this year, undershooting economists’ forecasts for a 2.7% growth.
High temperatures, heavy rains, and flooding hit several regions across the country last month, forcing factories and construction sites to suspend operations. This contributed to the economic slowdown, according to China’s National Bureau of Statistics.
The government appears less pressured to step up spending given the solid growth in the first half-year, said Lisheng Wang, a China economist at Goldman Sachs. However, economists warn that risks of full-year growth undershooting its target remain, calling for fresh policy support in the second half of the year.
Tensions between Beijing and Washington also remain unresolved. Despite extending a tariff pause for another 90 days, core disputes on tech access, critical minerals, and industrial policy remain unaddressed. The two countries are likely to discuss these issues during a potential summit between US President Donald Trump and Chinese Premier Xi Jinping in the coming months.
Source: https://www.cnbc.com/2025/08/15/chinas-growth-stumbles-in-july-as-weak-demand-industrial-capacity-curbs-weigh.html