China’s Growth Slows

China’s growth slowed in August.

A surprise slowdown in China’s growth activity occurred in August.  This has been taken as a sign that perhaps rising borrowing costs and property restrictions are having a more severe effect on the economy than expected.

Value-added industrial output is seen as a rough proxy for economic growth.  This also slowed for a second straight month. It rose 6.0% in August, compared with a 6.4% increase in July.  The median forecast had been of 6.6%.

Furthermore, growth in investments was the slowest in almost 18 years.  This was interpreted as an even more ominous sign.

Chinese officials blamed August’s slowdown on bad weather.  However, economists say a more likely cause was a cooling property market and waning effects from previous stimulus measures, which may have dampened domestic demand.

Economists hadn’t expected such a notable slowdown already in August.  A high-profile, twice-a-decade #leadership reshuffle is planned for the near future.

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