China Warns of Risks as July Data Underscores Economic Weakness

China’s economy still faces numerous vulnerabilities, the statistics agency said, attributing July 2025’s weak performance to ‘ongoing challenges from the complex and unpredictable global environment’ and extreme weather. At the same time, authorities stepped up oversight of excessive production in sectors like steel and coal to rein in fierce competition that has eroded profits and deepened deflation. Friday’s data showed industrial output rose 5.7% yoy, below forecasts of 5.9% and the slowest in eight months, while retail sales grew 3.7%, the weakest in six months and under the 4.6% consensus. The surveyed jobless rate climbed to a four-month high of 5.2%, and the property slump persisted with prices and investment continuing to fall. Meanwhile, a temporary U.S.-China trade truce, extended by 90 days, has averted tariff hikes, but manufacturers’ profits remain under pressure from weak demand and factory-gate deflation.