Beijing: China's industrial production in July grew at its lowest rate since February 2002 with the retail sector also taking a further hit amid a sharpening slowdown sparked by the US-China trade war. Industrial production -- a measure of the output of the industrial sectors in China's economy, including manufacturing, mining and utilities -- grew by 4.8% in July from a year earlier. This was down from 6.3% in June, which had improved from May's 5% growth rate.
Within the industrial production figures, manufacturing grew by 4.5% in July -- down from 6.2% in June -- and mining by 6.6% -- down from 7.3% in June. Retail sales rose 7.6% in July from a year earlier compared with 9.8% in June, said South China Morning Post quoting data from the National Bureau of Statistics released on Wednesday. Consumption has been a big concern for policymakers in Beijing. In all but one month in 2019, China's imports have declined in an unprecedented trend for a country used to enjoying huge trade growth.
This indicates that demand is weak in China, among both individual consumers as well as producers importing parts and components. While the government has taken a number of steps to encourage consumer spending -- such as discounts and subsidies for purchases of household goods and loosening of monetary policy to encourage bank lending -- they have not had the intended effect so far. Analysts expect consumer spending to slow further for the rest of the year due to the trade war tensions, said the daily newspaper.
US President Donald Trump on Tuesday moved forward with plans to place a new 10% tariff on Chinese goods. While initially mooted as a blanket tariff on 300 billion dollars of goods starting September 1, its implementation will now be staggered with 130 billion dollars of the tariffs coming in September. The remaining 155 billion dollars, which includes consumer items such as laptops, smartphones, video game consoles and toys, will now have a tariff reprieve until December 15.
The new tariff comes on top of 25% levies on another 250 billion dollars of Chinese goods which have placed huge pressure on the world's second largest economy's manufacturing base.