China reports slight beat in July retail sales, but industrial data disappoint

BEIJING — China's retail sales grew more than expected in July, while industrial production missed forecasts, the National Bureau of Statistics said Thursday.

Retail sales rose by 2.7% in July from a year ago, beating forecasts of 2.6% growth according to a Reuters poll.

Excluding cars, retail sales picked up to 3.6% year-on-year in July, from 3% in June, pointed out Bruce Pang, chief economist and head of research for Greater China at JLL.

Consumer spending helped offset sluggish investment in July, Pang said. He added it's important to see whether retail sales in August and September pick up enough to make consumption a major contributor to growth instead of investment.

Industrial production rose by 5.1% in July from a year ago, below the poll's forecast of 5.2%.

Fixed asset investment for the first seven months of the year rose by 3.6%, below the 3.9% growth analysts had predicted. Within fixed asset investment, the drag from real estate worsened, down by 10.2% on a year-to-date basis as of July, versus a drop of 10.1% as of June.

The infrastructure and manufacturing components also slowed their growth for the year as of July versus June.

The miss in fixed asset investment suggests "the drag from adverse weather conditions and still-depressed property investment more than offset the boost from ongoing piecemeal policy easing," Goldman Sachs analysts said in a report.

At least 25 major floods have hit China this year as of Aug. 1, the highest number since record-keeping began in 1998, according to the Ministry of Water Resources. Major cities such as Shanghai have also reported record-breaking heat waves this summer.

The urban unemployment rate ticked higher to 5.2% in July versus 5% in June.

"Pains are caused while old growth