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Data on Thursday showed China’s economy lost momentum in July with new home prices falling at the fastest pace in nine years, industrial output slowing and unemployment rising. read more
 "Premier Li Qiang")
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China’s Premier Li Qiang told a cabinet plenary session on Friday that great efforts must be made to boost the economy and the country will focus on stimulating consumption, state media reported.
Li added that China will look at measures to boost household income in both rural and urban areas, and will make support appropriate to the needs of different groups of people, state media reported.
China’s economic growth failed to gain momentum after experiencing its most sluggish period in five quarters with an uneven recovery in July held back by consumer spending still lagging industrial activity & investment.
Industrial output rose 5.1% from a year ago, down from June’s increase of 5.3%.
According to a report, the string of dismal indicators has dulled expectations for China’s economic performance in July, an ominous sign for the rest of 2024 and pointing to the need for more stimulus measures beyond plastering over pain points in the world’s second-largest economy.
Calls for more growth-boosting measures for the $19 trillion economy have dogged officials after a widely expected post-pandemic recovery failed to materialise in 2023. Still, the government is targeting economic growth of around 5% this year.
The latest data point to a rocky start to the second half. On Tuesday, central bank data showed July new bank loans plunged to a 15-year low, while other key gauges showed export growth slowed and factory activity slumped as manufacturers grapple with tepid domestic demand.
The economy had already grown more slowly than expected in the second quarter, expanding 4.7% from a year earlier, as wary consumers remained reluctant to spend and trade ties with major markets became more tense, suggesting a period of prolonged sluggishness is increasingly likely.
On Thursday, China will release a raft of activity data. Economists polled by Reuters poll expect that retail sales grew 2.6% year-on-year last month, versus 2.0% in June, while industrial output was forecast to have grown more slowly and investment growth levelled off.
Officials will also release the latest reading on new home prices, which fell at the fasted clip in nine years in June despite a host of support measures aimed at luring back buyers and stemming a protracted property crisis.
Credit data this week showed household loans, mostly mortgages, contracted 210 billion yuan ($29.37 billion) in July, compared with a rise of 570.9 billion in June. One of the main reasons people are not spending in China is 70% of household wealth is held in real estate, a sector which had long been a major growth driver.
With inputs from agencies.
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