China’s economy strains in August as retail sales, industrial output miss forecasts

China’s economy showed signs of strain in August, as sluggish domestic demand, headwinds from the US trade war and a prolonged property downturn continued to weigh on several major indicators.

Retail sales, a major gauge of consumption, rose by 3.4 per cent in August from a year earlier, missing the 3.82 per cent forecast in a poll by financial data provider Wind and down from July’s 3.7 per cent growth, data from the National Bureau of Statistics (NBS) showed on Monday.

Fu Linghui, spokesperson for the bureau, said the economy was “generally stable” in August, but cautioned that “many unstable and uncertain factors in the external environment” remained, with the economy “confronted with multiple risks and challenges”.

“We must fully implement macro policies, focus on keeping employment, businesses, market and expectations stable, and deepen reform and opening up and innovation, so as to foster steady and healthy economic development,” he added.

Beijing has prioritised raising domestic consumption this year, as it seeks to rebalance the economy and offset the impact of heightened trade tensions with the United States.

While the country’s trade-in programme for appliances and other goods has been a major driver of spending this year, several provinces have had to suspend their subsidies for certain items due to depleted funds.

China has since pledged more financial support to spur spending, unveiling a year-long plan last month to subsidise interest on personal consumer loans.