Major Slump Recorded In China’s Economic Growth: Report
China is ruled by the Chinese Communist Party.
Industrial production grew by only 5.1 per cent on an annual basis in July in China.
China is increasingly facing problems on the economic front and is not showing any signs of recovering soon. The country ruled by the Chinese Communist Party has clinched the title of the second-largest economy. Currently, China’s economy is facing recession even after 5 quarters, thus putting the growth largely at risk. As per the reports, there was a slight improvement in the country’s economic growth in July. Despite this marginal improvement, consumer spending lagged far behind industrial activity and investment. Thus, the efforts being made to improve China’s economic growth are not having the desired impact. As per the data released by China’s National Bureau of Statistics (NBS), industrial production grew by only 5.1 percent on an annual basis in July. This is less than 5.3 percent in June. During this period, the urban unemployment rate also increased to 5.2 percent for the first time since February.
China’s retail sales of consumer goods went up 2.7 percent a year. This was slightly better than expected and more than July’s 2 percent increase. The reason for this increase may be the profit earned from the summer holiday season. Despite these steps, the pace of improvement in overall consumer spending remained slow. The NBS said in its statement that the economy remained “overall stable” in July and some improvement was also seen. It also acknowledged that “the negative impact of the changing external environment is increasing, while domestic demand is still insufficient.”
According to the NBS, the transition from old to new growth indexes is creating temporary roadblocks, which are pushing the country’s economy toward crisis. China’s currency Yuan is also facing currency and has suffered losses in both onshore and offshore markets. This is despite the central bank raising the currency’s daily reference rate to its strongest level in a week. Along with this, the yield of a 10-year government bond also increased by 1 basis point to 2.18 percent, due to which the concerns of investors have increased further. The government also launched the biggest rescue package for the real estate sector in May, but the market has not seen any significant improvement.
