China’s economy has slowed considerably. According to its National Bureau of Statistics for China, “In July, the total value added of the industrial enterprises above the designated size grew by 4.8 percent year on year.” While in most economies this would still be considered strong growth, in China it is the worst improvement since 2002 and is below, obviously, the data from the Great Recession. China has entered what is, by its standards, a recession.
Several other measures were slightly better, but well below historic levels:
In July, the Index of Services Production increased by 6.3 percent year on year, 0.8 percentage point lower than that of last month. In the first seven months, the Index of Services Production grew by 7.1 percent, 0.2 percentage point lower than that of the first six months.
In July, the total retail sales of consumer goods reached 3,307.3 billion yuan, a year on year growth of 7.6 percent, 2.2 percentage points lower than that of last month.
In the first seven months, the investment in fixed assets (excluding rural households) was 34,889.2 billion yuan, a year on year growth of 5.7 percent, or 0.1 percentage point lower than that of the first six months. Specifically, private investment reached 21,026.7 billion yuan, up by 5.4 percent.
Reuters described the problem. Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong, said, “The economy is going to continue to slow down. At a certain point, policymakers will have to step up stimulus to support infrastructure and property. I think it could happen by the end of this year.”
While President Trump has delayed some tariffs until the end of the year, they are still in place on tens of billions of dollars in imports from China. No amount of stimulus will be able to offset that.