Investing.com - China’s industrial output grew slower than expected in July, while retails and fixed-asset investments also missed estimates, data on Tuesday showed.
Industrial output grew 6% in July from a year earlier, according to official data, while analysts had expected the output to grow at 6.3%.
Fixed-asset investment growth on the other hand also slowed more than expected to 5.5% in the first seven months of the year.
Private sector investment, which accounted for about 60% of overall investment in China, rose 8.8% in the period of January to July, compared with an increase of 8.4% in the first half year.
Retail sales rose 8.8% in July from a year earlier, compared to the expected 9.1% and down from 9% in June.
Analysts believe an escalating trade dispute with the U.S. and recent tightening policies are likely to impact the outlook of China’s economy and that it may be at risk of a sharper slowdown than expected.
“The economy is slowing down as the result of the relatively tight policies in the past six quarters,” said Gene Ma, chief China economist at the Institute of International Finance in Washington, who expects fiscal policy to be more supportive in the second half of 2018. “Tighter policies on shadow credit inevitably hurt small and private businesses. Rising trade tension started to hurt confidence, but not yet the real growth as exporters moved up their exports.”
"There was too much tightening" and there were policy errors made in the first half that ought to be corrected, Liang Hong, chief economist at China International Capital Corporation Ltd. in Beijing, said in an interview with Bloomberg TV. "Some of the policy adjustments just happened in July, so people are expecting in the third quarter we should see more stabilization."