China’s weak industrial production data reinforced concerns that the Chinese economic slowdown further deepened.
The East Asian’s industrial production slowed to 4.4 percent in August, its slowest rate in 17 years. It’s down from the previous month’s 4.8 percent reading. Also, it missed analyst expectations of a 5.2 percent growth.
China’s trade war with the U.S. has clearly reduced the country’s economic growth. Chinese retail sales also missed expectations, with growth slightly pulling back from July’s 7.6% to 7.5% recorded in August. Capital investment was also a weak spot. It fell from 5.7 percent growth in the period between January and July, to 5.5 percent in August.
Analysts at Bloomberg predicted retail sales and investment growth to be at 7.9 percent and 5.7, respectively.
China’s gross domestic product growth cooled to 6.2 percent in the second quarter, the weakest pace in almost three decades.
“For China to maintain growth of 6.0 percent or more is very difficult against the current backdrop of a complicated international situation and a relatively high base, and this rate is at the forefront of the world’s leading economies,” Chinese Premier Li Keqiang said.
Easing of Monetary Conditions
Earlier this month, the People’s Bank of China announced that it would cut the amount of cash lenders must keep in reserve to help shore up China’s stumbling economy.
“With a strong rebound unlikely any time soon, we anticipate that policymakers will ease monetary conditions further in the coming months,” said Martin Lynge Rasmussen, China economist at Capital Economics.
The U.S. and China have agreed to meet in October to go back to the negotiating table. The two also agreed to put off additional tariffs on each others goods. Market analysts are hoping for the two countries to strike a deal next month.
