Sat Sep 14 03:56:00 UTC 2024: ## China’s Economic Growth Slows to Five-Month Low, Underscoring Need for Stimulus

**BEIJING** – China’s industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further, raising concerns about the country’s economic health. The data released on September 14 reinforces the need for aggressive stimulus measures to prop up the economy and achieve its annual growth target.

Industrial production expanded by 4.5% year-on-year in August, a slowdown from July’s 5.1% growth and the weakest expansion since March. This missed analysts’ expectations for a 4.8% increase. Retail sales, a crucial indicator of consumer spending, rose only 2.1% in August, decelerating from the previous month’s 2.7% growth, despite the peak summer travel season.

Analysts attribute the sluggish performance to weak domestic demand, highlighting the challenges in reviving consumer confidence. The protracted property slump has led to Chinese consumers cutting back on spending. Experts have even proposed distributing shopping vouchers to stimulate consumption.

“The momentum is slowing down… The bottleneck remains domestic demand,” said ANZ senior China strategist Xing Zhaopeng.

The slowdown has prompted global brokerages to revise their 2024 growth forecasts for China downwards, below the government’s official target of around 5%.

President Xi Jinping has urged authorities to strive for achieving the country’s annual economic and social development goals, suggesting further action is needed to revitalize the economic recovery.

However, the time for introducing measures is running out, with the third quarter nearing its end, according to ING chief China economist Lynn Song.

The troubled property sector remains a significant drag on growth. New home prices fell at the fastest pace in over nine years in August, with only two out of 70 surveyed cities reporting price gains.

While Beijing has intensified efforts to rescue the housing market, analysts believe more aggressive steps are required to support debt-laden developers and encourage potential homebuyers to return to the market.

The only bright spot for China’s economy has been exports, but analysts remain uncertain about the sustainability of this trend due to escalating trade tensions with several countries and regions.

With global growth expected to slow down in 2025, investors are focusing on the outlook for China’s economic performance next year. Concerns remain about the impact of continued tight fiscal policies on China’s exports and overall growth.

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