China's Fixed-Asset Investment Growth Slowed in August
Chinese August economic data once again pointed to a slowdown of economic growth, in anticipation of the next round of the US-China trade talks. Plans of the US President to impose tariffs on an additional $200 billion of Chinese goods have increased the risk of a deeper slowdown.
Fixed-asset investment growth in the first eight months slowed to the lowest pace since 1999 and infrastructure investment rose just 4.2% (the weakest expansion since the data series started in 2014). Investment increased by 5.3% year-on-year in the first eight months, compared with the forecasts for 5.6% growth and 5.5% increase in the previous month.
Chinese industrial production grew by 6.1% in August, meeting estimates. Retail sales in China increased by 9% yoy in August, accelerating from an 8.8% growth in July. The surveyed jobless rate in urban areas declined to 5% in August, versus 5.1% in July. Output of computer and communication gadgets surged 17.1% yoy last month.
Since US trade tariffs threaten to increase pressure on China's already slowing economy, Chinese policymakers have shifted attention to measures to stimulate growth, from increasing spending on infrastructure to reducing taxes and fees. But analysts say that such measures will take time to start acting, and most likely will only soften the impact on business if Washington continues to implement more tariffs.