A delivery man transports home appliances from a delivery center.
(Photo: dpa)
Beijing As a sign of a weakening economy, important economic data in China again fell short of expectations in July. The Beijing Bureau of Statistics reported on Monday that retail sales growth slowed to 2.7 percent year-on-year in July.
Chinese industrial production also grew at 3.8 percent in July, slower than analysts had expected. Just like fixed investments, which increased by 5.7 percent in the period from January to July.
In order to give the economy new impetus, China’s central bank surprisingly lowered the interest rate for one-year refinancing transactions with banks on Monday for the first time since January. This fell 10 basis points to 2.75 percent. This is intended to reduce the cost of credit for companies.
China’s growth targets not met
The central bank also lowered the key rate for so-called reverse repo transactions on Monday to 2.0 percent from the previous 2.10 percent. This serves to control the liquidity in the banking system. Most analysts weren’t expecting the moves. It was the second 10 basis point cut in these rates this year.
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China’s economy is currently facing numerous problems. It is expected that the growth target of 5.5 percent for this year cannot be achieved. In the spring, gross domestic product (GDP) increased by only 0.4 percent, mainly due to tough corona lockdowns.
The economy is suffering from the fact that Beijing is not moving away from its “zero corona policy”. The aim of this is to nip any outbreak in the bud. Numerous megacities had imposed strict measures, especially in spring, to prevent the spread of the highly contagious omicron variant. Problems in the real estate market are also weighing on growth in China.
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