China's economy lags in July under pressure from tariffs and a weak
property market
[August 15, 2025] By
ELAINE KURTENBACH
BANGKOK (AP) — China's economy showed signs of slowing in July as
factory output and retail sales slowed and housing prices dropped
further, according to data released Friday.
Uncertainty over tariffs on exports to the United States is still
looming over the world's second-largest economy after President Donald
Trump extended a pause in sharp hikes in import duties for 90 days,
beginning Monday, following a 90-day pause that began in May.
As officials worked toward a broader trade agreement, China reported
earlier that its exports surged 7.2% in July year-on-year, while its
imports grew at the fastest pace in a year, as businesses rushed to take
advantage of the truce in Trump's trade war with Beijing.
But that also reflected a lower base for comparison, and manufacturers
have slowed investments, hiring and production as they watch to see what
comes. Chinese manufacturers also have ramped up shipments to Southeast
Asia, Africa and other regions to help offset lost business in the U.S.
“Exports remained a bright spot although the boost from front-loading
appears to be tapering off and has started to show up in weak industrial
production, as we anticipated,” Oxford Economics’ Sheana Yue wrote in a
report.
China also has been enduring flooding from torrential seasonal rains
that have disrupted business activity in many parts of the country
The statistics bureau's report said the economy had shown “notable
resilience and vitality against the complex and volatile external
environment and adverse impacts from extreme domestic weather.”
Annual growth in industrial output slowed to 5.7% in July from 6.8% in
June, the National Bureau of Statistics said. That was an 8-month low.
Investments in factory equipment and other fixed assets rose a meager
1.6% in January-July, compared with 2.8% growth in the first half of the
year.
“Chinese economic activity slowed across the board in July, with retail
sales, fixed asset investment, and value added of industry growth all
reaching the lowest levels of the year,” Lynne Song of ING Economics
said in a report.
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People wait for their ride-hailing transportation as workers load
boxes of goods from a truck at a commercial district, in Beijing,
Monday, Aug 4, 2025. (AP Photo/Andy Wong)
 Property investments plunged 12% in
the first seven months of the year, with residential housing
investment dropping nearly 11%.
Prices for newly built housing in major cities fell 1.1%, as a
prolonged downturn in the property industry lingered.
Yue of Oxford Economics said prices could continue to fall before
stabilizing in 2028.
The meltdown in the housing market hit just as the COVID -19
pandemic began, sapping one of the economy's main drivers of growth
and causing dozens of developers to default on their debts.
The crisis rippled throughout the economy, destroying jobs for
millions of people.
The government has sought to ensure that most housing that was paid
for gets built, but sales remain weak despite a series of moves
meant to entice families into back into the market.
Since most Chinese families have their wealth tied up in property,
the anemic housing market has been a major factor crimping consumer
spending. In July, retail sales rose 3.7%, the slowest rate in seven
months and down from a 4.8% increase in June.
The unemployment rate rose to 5.2% from 5% as university graduates
began looking for work.
While consumer prices rose 0.4% in July from the month before,
prices at the wholesale level slipped 3.6% from a year earlier in
another indicator of relatively weak demand.
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Shihuan Chen in Beijing contributed to this report.
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