China’s economic indicators are expected to show marginal improvement in July compared to June, signaling the potential for further release of domestic demand. The National Bureau of Statistics will release the macroeconomic data for July on August 15, providing valuable insights into the economic trend for the second half of the year.
One important aspect to watch is the growth rate of consumption and industry, which is projected to accelerate in July, while investment growth is expected to stabilize. However, data on import and export and social credit indicate that there is still a contradiction of insufficient demand.
In July, new RMB loans reached a new low since December 2009, indicating a negative credit growth for the household sector and a nearly three-year low for the corporate sector. Moreover, the total import and export value for the first seven months of the year increased only by 0.4% year-on-year, adding to the pressure on foreign trade.
Despite these challenges, the latest “China Business News Chief Economist Confidence Index” suggests that economists remain cautiously optimistic. With the implementation of various support policies, they believe that although there is still downward pressure on China’s economy, it will recover faster in the future.
Regarding industrial growth, economists predict a slight acceleration in the average year-on-year growth rate of industrial added value in July, compared to the previous month. Leading indicators, such as the Manufacturing Purchasing Managers Index and high-frequency data on industrial production activities, also indicate signs of recovery and increased confidence among businesses. Industrial production is expected to grow by around 4.5% in July and continue to recover in August.
In terms of consumption, the ongoing optimization of the consumption environment and the impact of policy measures have contributed to the release of consumption potential. Offline scenes such as catering, cultural tourism, and theaters are recovering rapidly, and residents’ willingness to travel remains strong. Therefore, the resilience of consumption is expected to continue, particularly in the automotive and service sectors.
As for investment, the overall effective demand is still relatively insufficient, but there are positive signs in infrastructure investment and the stabilization of the new special bond issuance. Infrastructure investment is expected to play a supportive role, while the real estate sector may continue to weaken.
In conclusion, although challenges remain, China’s economic indicators for July point toward marginal improvement and the potential for further release of domestic demand. The implementation of support policies and the gradual recovery of various sectors will likely contribute to future economic recovery and growth.