China's economic slowdown deepens in August with retail sales

China's economic slowdown deepened in August with a raft of key indicators missing expectations, as weak domestic demand persisted and Beijing's campaign against industrial overcapacity curbed output, Report informs via CNBC.

Retail sales last month rose 3.4% from a year earlier, data from the National Bureau of Statistics showed Monday, missing analysts' estimates for 3.9% growth in a Reuters poll and slowing from July's 3.7% growth.

Industrial output growth slowed to 5.2% in August, compared to the 5.7% jump in July, marking its weakest level since August 2024, according to LSEG data. Economists had expected the data to be unchanged from the previous month.

Fixed-asset investment, reported on a year-to-date basis, expanded just 0.5%, a sharp slowdown from the 1.6% expansion in the January to July period, and undershooting economists' forecasts for 1.4% growth.

Within that segment, the contraction in real estate investment worsened, slumping 12.9% in the first eight months, government data showed. Investment in the manufacturing and utilities sector - including electricity, fuel and water supplies - increased 5.1% and 18.8% from a year earlier, respectively.

Fixed-asset investments have been largely propped up by state-owned enterprises, with investments from the private sector contracting from a year earlier, said Yuhan Zhang, principal economist at think-tank The Conference Board's China Center.

Investments in manufacturing overall have seen "modest and uneven growth," Zhang added, mainly supported by policy-driven state investment in infrastructure, high-tech and industrial upgrading, while real estate activity remains weak.

China's survey-based urban unemployment rate in August came in at 5.3%, edging higher from 5.2% in the prior month. The statistics bureau attributed the rise in the jobless rate to the graduation season.

"We should be aware that there are many unstable and uncertain factors in (the) external environment, and national economic development is still confronted with multiple risks and challenges," the statistics bureau said in an English-language release.

"We must fully implement macro policies, focus on keeping employment, businesses, market…expectations stable, deepen reform and opening up and innovation, so as to foster steady and healthy economic development."

Retail sales, excluding automobile consumption, grew 3.7% in August from a year earlier. Consumption growth in rural areas outpaced that in the urban centers, growing 4.6% in August from a year ago.