China’s factory sector experienced its weakest growth in a year last month, while retail sales slumped to a nine-month low, underscoring persistent economic challenges for the world’s second-largest economy. These figures are expected to reinforce calls for additional stimulus from policymakers in Beijing as they seek to bolster momentum in the $19 trillion economy.
According to data released by the National Bureau of Statistics on Monday, industrial output rose 5.2% year-on-year in August, marking the slowest pace since August 2024. This result missed the 5.7% increase forecast by analysts in a Reuters poll and also fell short of July’s 5.7% expansion.
Retail sales growth—a closely watched barometer of consumer activity—came in at 3.4%, the most sluggish reading since November 2024, and below the expected 3.9% gain. The data also represented a retreat from a 3.7% rise in July.
The disappointing numbers highlight ongoing difficulties facing Chinese manufacturers, who are contending with uncertainty over U.S. trade relations, subdued domestic spending due to an uneven labour market, and a prolonged slump in the property sector. Further evidence earlier this month showed some manufacturers have managed to shift exports away from the U.S. towards markets in Southeast Asia, Africa, and Latin America, but the ongoing property crisis continues to weigh heavily on economic stability.
Economists expect near-term fiscal support may be necessary to keep China on track to meet its annual GDP growth objective of around 5%.
