As China’s National Statistics Office announced today, industrial production in July was 9.7% up on a year earlier. That is a marked improvement on June, when the increase was only 8.9%. There was also encouraging news from the retail sector, with sales up slightly more than 13% on a year earlier and thus maintaining the pace of expansion seen in recent months. The 12-month increase in consumer prices was unchanged on the previous month at 2.7%.
The foreign trade figures published earlier this week had already served to brighten up, at least somewhat, the of late markedly murkier external trade picture. Exports rose by 5.1% on a year earlier in July, while imports were up by almost 11%, having previously fallen marginally for two months in a row. By contrast, the two purchasing managers’ indices for the manufacturing sector provided a mixed picture. While the index released jointly by Markit and HSBC fell slightly in July and remained mired well below the 50-point expansion threshold, the official index edged up and remained just above 50 points.
All told, we expect growth momentum in China to pick up somewhat in the second half of 2013. In the year as a whole, real gross domestic product is likely to increase by 7.6%, slightly higher than widely assumed. Nonetheless, that would be the weakest economic growth since 1999.