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SHANGHAI (Reuters) – The slowdown in China's manufacturing and consumer sectors has been accentuated in August. Industrial production grew at the slowest pace in 17.5 years, a sign of growing weakness in an economy hit by trade barriers and weak domestic demand.
Production rose 4.4% in August compared to July, which is lower than the 4.8% recorded in July. Analysts polled by Reuters had forecast that their production would increase by 5.2%.
Growth is the slowest since February 2002.
Chinese Premier Li Keqiang said Monday in an interview published Monday that it was "very difficult" for the economy to continue to grow at 6% or more and that she was facing a "financial crisis". downward pressure ".
The data also showed retail sales growth of 7.5%, lower than the 7.9% expected in a Reuters survey and up 7.6% in July.
Capital investment for the first eight months of the year rose 5.5%, according to data released by the National Bureau of Statistics, while analysts forecast an increase of 5.6%.
Data released last week showed that producer prices fell at their fastest pace in three years and analysts expect that output deflation will continue to worsen over the next few months.
It is also the result of a factory survey that showed that activity had declined for the fourth consecutive month as a result of the US trade war. Chinese imports of unwrought copper also fell 3.8% from one year to the next in August, a metal widely used in infrastructure, electricity and consumption.
China is wrestling with a trade war of more than a year with the United States that has upset global supply chains. Trade negotiators are expected to meet later this month. A summit summit is expected to be held in Washington in October, although a resolution seems unlikely.
US President Donald Trump had announced that he would further increase 5% tariffs by the end of August on the $ 550 billion worth of Chinese goods imported to the United States.
To counter this weakness, analysts expect the latest figures to lead to a further reduction in key interest rates on loans by the Chinese authorities. The government said it would keep a relatively small hand.
China has already reduced the amount of cash that banks must keep in reserve, which should unlock 900 billion yuan (126.35 billion dollars) for loans to businesses in need of credit.
Private sector capital investment, which accounts for about 60 percent of the country's total investment, grew 4.9 percent in January-August, compared to 5.4 percent in the first seven months of 2019.
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