Chinese economic data for July prints well below forecasts

A raft of economic indicators released overnight in China printed below forecasts, pointing to sustained weakness in growth in the Asian giant until mid-2019, economists said.

According to the National Bureau of Statistics, the rate of growth in Chinese industrial production in June was unchanged from the month before, at up by 6.0% year-on-year (consensus: 6.3%).

Fixed asset investment was especially weak, with the year-to-date rate of increase slipping from 6.0% to 5.5%.

According to Julian Evans-Pritchard at Capital Economics, that was equivalent to a slowdown in the year-on-year rate of growth from 5.7% to 3.0% - the slowest pace on record.

Of interest, Evans-Pritchard noted how higher property investment had been offset by a decline in manufacturing and infrastructure investment.

Nevertheless, rising mortgage rates and property controls meant the former was unlikely to be sustained, the same analyst said.

Retail sales also weakened, with the pace of growth slowing from 9.0% year-on-year to 8.8%.

"Admittedly, infrastructure spending may soon bottom out given the recent shift toward a looser fiscal stance and monetary easing should eventually drive a turnaround in credit growth. However, these are unlikely to put a floor beneath economic growth until the middle of next year."