China’s economy showed further signs of weakness last month, with key data Monday revealing factory output and consumption rising at their weakest pace for around a year.
Beijing has struggled to fully reignite the world’s number two economy since the end of the COVID-19 pandemic, with the once-booming property sector mired in a debt crisis and exports facing mounting headwinds.
The trends have contributed to a slump in consumer confidence, dragging on spending and threatening leaders’ official growth target for this year of around 5%.
Industrial production edged up 5.2% year-on-year in August, according to data from the National Bureau of Statistics (NBS), the slowest pace since the same month last year.
The figure missed the 5.6% growth forecast in a Bloomberg survey of economists.
The NBS also said retail sales climbed 3.4% last month—the slowest since November and falling short of the 3.8% estimated in the Bloomberg survey.
“The activity data point to a further loss of momentum last month,” Zichun Huang, China economist at Capital Economics, wrote in a note.
“While some of this reflects temporary weather-related disruptions, underlying growth is clearly sliding, raising pressure on policymakers to step in with additional support,” she said.
New residential property prices fell year-on-year during August in 65 out of 70 cities surveyed by the NBS, data also showed.
Urban unemployment ticked up to 5.3% last month, a slight increase from 5.2% in July, according to NBS data.
“In the domestic market supply is strong, demand is weak and some enterprises are facing operational difficulties,” NBS chief economist Fu Linghui told a news conference Monday.
Fu added that “there is still much instability and uncertainty in the external environment, and (China’s) economic performance still faces numerous risks and challenges”.
One of the main challenges facing the economy is the strained relationship between Beijing and Washington as disputes over technology and geopolitics mount.
China-U.S. trade tensions have been on a rollercoaster ride in 2025, with both sides slapping escalating tariffs on each other.
Officials from the two countries on Sunday kicked off a fresh round of talks in Madrid, where they are set to thrash out disputes over hefty U.S. tariffs and other key issues.
Tit-for-tat levies reached triple digits on both sides at one point this year, snarling supply chains.
Leaders have since reached an agreement to de-escalate tensions, temporarily lowering the duties to 30% on the United States’ side and 10% on China’s part.
They agreed last month to extend their pause for another 90 days until November 10.