China's economic recovery falters amid real estate problems, weak consumption
Date
8/18/2024 5:34:52 AM
(MENAFN) China's economic recovery faced setbacks in July, as continuing issues in the property sector and weak consumer spending slowed growth. According to data from the National Bureau of Statistics, the unemployment rate rose for the first time since February, reaching 5.2 percent compared to 5 percent in June. This increase in unemployment comes alongside a slowdown in industrial production, which grew by 5.1 percent year-on-year in July, down from 5.3 percent in June. Despite these challenges, retail sales showed a modest improvement, rising 2.7 percent year-on-year in July compared to 2 percent in June, slightly exceeding analysts' expectations.
To support economic recovery, the Chinese government has introduced measures to stimulate consumer spending. Recent policies include using 150 billion yuan (USD20.9 billion) in government debt to fund promotions and discounts on consumer goods such as appliances and cars. Consumption, which contributed approximately 60 percent to China's economic growth in the first half of the year, is expected to play a crucial role in supporting the economy as it faces headwinds from strained trade relations with the United States and other Western countries.
The rise in urban unemployment, attributed partly to the graduation season, is a sensitive issue for the ruling Communist Party. Additionally, real estate investment continues to decline, falling 10.2 percent year-on-year in the first seven months of the year, a slight increase in the rate of decline from the 10.1 percent drop observed in the January-June period. These figures highlight ongoing economic challenges as China seeks to balance recovery efforts with structural issues in key sectors.
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