Sumary of China’s retail sales growth slows:
- BEIJING • China’s economy took a knock last month from stringent Covid-19 controls and tight curbs on property, fuelling concerns about the global recovery as countries battle to get outbreaks of the Delta variant under control.
- China’s slowing growth underlines how the spread of the Delta variant is challenging the world’s economic recovery from the pandemic.
- The slowdown in construction – which pushed China’s steel output to a 17-month low last month – is rippling across the global economy by reducing Chinese demand for commodities such as iron ore.
- “Markets so far have significantly underestimated the scale of growth slowdown in the second half,” said Mr Lu Ting, chief China economist at Nomura Holdings in Hong Kong.
- The authorities will stick to their approach of “short-term pains in order to seek long-term gains”, and will likely maintain property curbs, he said.
- China introduced stringent new curbs on travel to squash an outbreak of the Delta variant from late July, leading restaurant and catering sales to contract 4.5 per cent in August from a year ago after climbing 14.3 per cent in the previous month.
- While China quickly brought the outbreak under control, a new virus cluster developed in southern China this month, suggesting that consumers will continue to remain cautious.
- China’s government is refraining from broad stimulus to support the economy, with policymakers ramping up targeted programmes for smaller businesses instead, and pledging fiscal support through the use of local government bonds.