China says economy making steady progress despite weak data

BEIJING, China – A Chinese official tried Friday to reassure companies and investors that economic growth is stable despite unexpectedly weak July activity but acknowledged it faces pressure from lacklustre global demand.

Weakness in factory output, imports and other activity was due partly to summer flooding that caused 200 billion yuan ($35 billion) in losses and other one-time factors, said Sheng Laiyun, spokesman for the National Bureau of Statistics.

The poor performance prompted suggestions the Chinese economy might be cooling despite repeated government stimulus efforts. Growth held steady at 6.7 per cent for the three months ending in July, though that was the weakest quarterly performance since the aftermath of the 2008 global crisis.

“The trend is good,” Sheng told a news conference. “Even though economic growth dropped slightly, the economy is stable and making steady progress, and the steady trend toward improvement has not changed.”

Sheng acknowledged, however, that China faces “downward pressure” from weak global demand as Beijing carries out a marathon effort to nurture consumer-driven growth and reduce reliance on trade and investment.

Data reported Friday showed retail sales rose 10.2 per cent in July from a year earlier, down from June’s 10.6 per cent growth. Factory output rose 6 per cent in July over a year ago, down from 6.2 per cent in June.

Investment in factories, real estate and other fixed assets rose 2.1 per cent in the seven months ending in July, down from the first half’s 2.8 per cent and 5.7 per cent in the first quarter.

Customs data earlier showed July exports contracted by 4.4 per cent from a year ago while imports plunged 12.5 per cent.