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.
