demand renew pressure on policymakers to step up stimulus.
The disappointing data, following second-quarter growth that cooled to a three-and-a-half-year low, highlights China’s continued dependence on exports to offset sluggish consumption and investment even as it confronts headwinds from U.S. tariffs and the conflict in the Middle East.
Getting China’s roughly 1.4 billion population spending again will not be easy while the country’s property sector remains in a slump, with new home prices in July down 3.2% from a year earlier and 0.1% from June.
Economists estimate that about 52% of household wealth is tied up in real estate, a share that has declined in recent years as the protracted property crisis has pushed investors toward gold and other assets.
A seven-month domestic downturn contrasts with a 147.8 per cent jump in overseas shipments, highlighting a widening gap between domestic and export markets
Deliveries of electric vehicles (EVs) in China fell 3.9 per cent in July from a year earlier, extending their decline to a seventh consecutive month as fading government incentives and weaker consumer demand weighed on the market.
Domestic sales of pure electric and plug-in hybrid vehicles last month also fell 5.8 per cent from June, according to data from the China Passenger Car Association (CPCA).
Overall car deliveries in mainland China, including petrol-powered vehicles and EVs, plunged in July by 20.9 per cent, year on year, to 1.46 million units, CPCA data showed. EVs accounted for 65.1 per cent of the total car sales last month.
Analysts have predicted a fresh round of price cuts, as nearly all carmakers have been trying to reduce inventory.
Many domestic EV sales are done at a loss. Even the mighty BYD is impacted.
There is simply too many Chinese EV manufacturers. And not all of them can manage the export pivot. And in any case that pivot benefit will decline as the number of EV exports increases.
The result. Many Chinese EV manufacturers will bankrupt leaving the strongest surviving.
Industrial production (IP) growth slowed to 4.5% yoy in July from 5.3% yoy in June, reflecting slower export growth and weaker output growth in ferrous metals smelting, power generation (fell 0.1% y/y to 943.9b kwh), and pharmaceuticals industries.
One stand out from Chinese steel production tumbled last month, putting the industry on track for the lowest annual total this decade as mills adjust to much weaker demand.
The contraction in construction activity has deepened, according to the latest purchasing manager index, while fixed-asset investment has fallen dramatically, the data from the statistics bureau showed.