Xi Jinping China industrial output slows sharply in July

China's industrial output, a key engine of growth, slowed sharply in July as government efforts to rein in debt weighed on demand and economic activity, official data showed Monday.

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Output by Chinese factories and workshops slowed sharply in July, growing by a lower-than-expected 6.4 percent compared to the same month last year, official figures showed on Monday play

Output by Chinese factories and workshops slowed sharply in July, growing by a lower-than-expected 6.4 percent compared to the same month last year, official figures showed on Monday

(AFP/File)
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China's industrial output, a key engine of growth, slowed sharply in July as government efforts to rein in debt weighed on demand and economic activity, official data showed Monday.

The figures come as the authorities have sought to tighten regulations to tame debt as well as reduce excess capacity left over from massive government-backed infrastructure spending at the height of the global financial crisis.

Output by Chinese factories and workshops grew by a lower-than-expected 6.4 percent compared to the same month last year, the national statistics bureau said.

Economists surveyed by Bloomberg News had expected growth of 7.1 percent for July after industrial production expanded by 7.6 percent in June.

Retail sales, meanwhile, slowed slightly to 10.4 percent last month while fixed asset investment posted 8.3 percent growth in the January-July period -- both slightly below expectations.

"In general, the national economy was generally steady in July with continued positive momentum and deepening structural reform," national statistics bureau spokesman Mao Shengyong said at a news conference.

"But we also see that the international circumstance is still complicated and fluid, domestic structural conflicts still stand out, and there are still a lot of hidden concerns."

While China has posted better-than-expected second quarter growth of 6.9 percent, economic analysts have warned that the momentum will not last as authorities clamp down on debt.

Julian Evans-Pritchard, China economist at Capital Economics, said Monday's figures provided "mixed signals" as growth in electricity and steel output accelerated while production of consumer goods and most other commodities slowed.

"The upshot is that both foreign and domestic demand appear to have softened at the start of (the third quarter)," Evans-Pritchard said.

"A few sectors, such as steel, seem to have defied this slowdown in economic activity. But the strength in these areas likely won't last given that policy tightening is set to further weigh on infrastructure and property investment in coming months," he said.

China's economy faces another looming challenge as US President Donald Trump was due to sign on Monday a memorandum to launch an investigation into the Asian giant's intellectual property practices.

Trump will direct US Trade Representative Robert Lighthizer to determine whether any Chinese laws, policies or practices discriminate against or harm American innovators and technology companies, US officials said.

The officials, who spoke on condition of anonymity, bluntly accused China of "stealing our intellectual property" -- long a concern of Western companies seeking a share of the enormous Chinese market.

China's state-run Global Times in an editorial warned the move could spark a "trade war" as the world's second largest economy would retaliate.

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