TD Securities analysts point out that China’s industrial production has slowed sharply, hitting a multi-year low of 4.8% y/y in July as the manufacturing sector becomes increasingly impacted by tariffs.
“China’s manufacturing PMI has been in contraction for 4 straight months, while other indicators such as electricity production are weak, suggesting limited prospects of sustained bounce in IP. Nonetheless, IP weakness appears to have overshot the decline in PMI and a small retracement is expected in August to around 5.2% y/y.”
“Similarly after a relatively sharp slowing to 7.6% y/y retail sales are expected to pick up to 8.0% y/y While this marks an improvement, it is still close to the lowest since the beginning of 2007.”
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