(Yicai) Aug. 15 -- China’s retail sales rose a little more than forecast last month amid a raft of pro-consumption government policies, while industrial production missed expectations, official data showed.

Retail sales gained 2.7 percent  to CNY3.78 trillion (USD528 billion) in July from a year earlier, compared with a market forecast for 2.6 percent, and up from a 17-month low of 2 percent growth in the previous month, according to figures released today by the National Bureau of Statistics. July was the 18th straight month of expansion.

In the first seven months of the year, retail sales climbed 3.5 percent to CNY27.37 trillion (USD3.82 trillion), with services consumption standing out after expanding 7.2 percent.

China’s economy continued to develop steadily in July despite facing complex and difficult conditions at home and abroad as well as short-term factors such as rainstorms, floods, and extremely high temperatures, NBS spokeswoman Liu Aihua said at a press conference.

She noted that a recent Politburo meeting had emphasized the need to focus on boosting consumption and expanding domestic demand. Following the implementation of various policies, the foundations for the recovery of the consumer market are becoming more consolidated, Liu said.

Industrial Output

Industrial production slowed for a third consecutive month in July, gaining 5.1 percent from a year ago, the lowest since March, the NBS data showed. That was also below market expectations for a 5.2 percent increase and slower than June’s 5.3 percent growth clip.

Eighty percent of industries and nearly 60 percent of products notched up year-on-year gains, Liu pointed out.

The sales rate of industrial enterprises was 97.2 percent, up from 94.5 percent in the prior month, while their export delivery jumped 6.4 percent, climbing from 3.8 percent in June, after decelerating in April and May.

Among the major export industries, electronics saw an improvement from a year earlier, and the automotive industry has maintained double-digit growth in export delivery value for eight months since December 2023, Liu noted. The general equipment, special equipment, and chemical industries also logged double-digit gains.

Looking forward, she noted that the continued rise of emerging industries and future industries will provide more impetus for industrial development, which will be conducive for steady industrial growth.

Fixed-Asset Investment

From the January to July period, fixed-asset investment rose 3.6 percent to CNY28.76 trillion (USD4.03 trillion), less than the 3.9 percent the market anticipated. Excluding investment in real estate, fixed-asset investment jumped 8 percent.

Liu said that the slowdown was partly down to extremely heavy rainfalls and high temperatures, which have hit construction. But the supporting role of large projects remains significant, and the effect of large-scale equipment upgrade policies continues to be released, which continues to expand the investment scale, she said.

Driven by the upgrade policies, investment in purchases of equipment and tools surged 17 percent in the first seven months. Manufacturers’ outlays in technological transformation jumped 10.9 percent, keeping up double-digit growth and 7.3 percentage points faster than total investment growth.

The Politburo meeting at the end of July put forward requirements such as “speeding up the issuance and use of special bonds and making good use of ultra-long-term special treasury bonds,” according to Wang Qing, chief macro analyst at Golden Credit Rating.

This quarter will see a peak of government bond issuance, and the growth rate of infrastructure investment may pick up slightly after this month, Wang added.

Editor: Tom Litting