China's August factory activity picks up unexpectedly
China's factory activity unexpectedly expanded in August, with improvements in supply, domestic demand, and employment, suggesting government efforts to revive growth may be effective.
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Posted 9/1/2023, 4:22:13 AM
reuters.com
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China's previous economic model of investing in infrastructure and manufacturing led to a period of rapid growth and global export success.
China is implementing measures to boost household spending, ease property policies, increase car purchases, improve conditions for private businesses, and bolster financial markets in an effort to revive the economy's recovery and improve the business environment.
China's factory activity is expected to contract for a fifth consecutive month in August due to weak demand, posing challenges to the country's economic recovery.
Consumer spending in China rebounded in August, with all categories, including apparel, automotive, food, furniture, appliances, and luxury, experiencing increased sales compared to July, according to a survey by the China Beige Book. Retail sales in July rose by 2.5% year-on-year, raising concerns about China's economic growth, but the August survey showed a surge in spending, particularly in the services sector, which saw continued strength in travel and hospitality. Additionally, corporate borrowing increased as the cost of capital declined, indicating a boost in business activity. However, China's property sector continued to worsen, with house prices barely growing and home sales declining.
China's manufacturing activity contracted for a fifth consecutive month in August, putting pressure on officials to provide support to boost economic growth amid weak domestic and international demand.
China's services activity expanded at its slowest pace in eight months in August, as weak demand and stimulus measures failed to revive consumption, according to a private-sector survey.
China's passenger vehicle sales experienced growth in August, driven by discounts and tax breaks on environmentally friendly and electric cars, despite a weak economy, and Tesla's share of the Chinese electric vehicle market nearly doubled.
China's factory output and retail sales grew at a faster pace in August, but declining investment in the property sector poses a threat to the country's economic recovery.
China's economic data for August shows a mixed picture, with retail sales and production on the rise, property investment declining, and the urban jobless rate ticking downward, leading experts to believe that while there may be modest improvements in growth, a strong recovery is still unlikely.