Beijing: China’s factories have picked up pace and retail sales also picked up in August. The report released by the government on Friday indicated that the economy may gradually recover from the situation after the global pandemic. However, the data showed continued weakness across all key property sectors despite brisk activity in restaurants and shops.
Real estate developers are struggling to repay loans due to sluggish demand. Real estate investment declined by 8.8 percent on an annual basis in August. The decline has been increasing continuously since the beginning of the year. To reduce the burden on banks, the People’s Bank of China, or the central bank, said late Thursday that the reserve requirement for most lenders will be cut by 0.25 percentage points by Friday.
According to the central bank, this will make more money available for lending “to strengthen the foundation of economic recovery and maintain appropriate and adequate liquidity”. According to the report released on Friday, retail sales in August increased by 4.6 percent on an annual basis, auto sales increased by 5.1 percent. Retail sales were up a modest 2.5 percent in July.
Industrial output grew at a 4.5 percent annual pace, the fastest increase since April. It had increased by more than 3.7 percent in July. Julian Evans-Pritchard of Capital Economics said in the report that the trends in August were slightly better than expected. China’s economy grew 0.8 percent in the April-June quarter compared to the previous quarter.