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China’s Economy July 2022

China's economy is still facing significant challenges as July has seen a rise in new outbreaks of COVID-19 along with the downcycle of the property sector and slowing global growth. There has been mixed growth in most economic indicators, which has been below expectations.

The National Bureau of Statistics (NBS) reported Monday that retail sales of consumer goods, a major indicator of the country's consumption strength, increased 2.7 percent year on year in July.

NBS data show the country's sales of consumer goods in July totaled around 3.59 trillion RMB (about USD 532.6 billion). In the first seven months, China's total retail sales of consumer goods stood at 24.63 trillion RMB, down 0.2 percent year on year.

Retail sales were bolstered by online consumption. In the January-July period, online sales of physical goods climbed 5.7 percent year on year.

Moreover, data showed that sales of major supermarkets grew 4.1 percent year on year in the first seven months, while that of convenience stores rose 4.6 percent from a year ago.

With policies to boost demand, the decline in catering revenue has narrowed. Revenues in the sector fell 1.5 percent year-over-year in July, narrowing by 2.5 percentage points from June.

The pro-consumption policies, supportive measures for enterprises, and improved consumption environment will continue to boost China's consumption.

The first seven months of 2022 saw China's value-added industrial output, an important economic indicator, rise by 3.5 percent compared to the same period a year earlier.

The industrial output measures the activity of designated large enterprises with an annual business turnover of at least 20 million RMB (about USD 2.96 million).

In July alone, industrial output rose 3.8 percent year on year and expanded 0.38 percent over June, according to the NBS.