China-led SCO, a counterweight to the West

China's economy showed signs of weakness in July, with retail sales growth slowing to 0.6% and industrial output expanding by 4.5%, both missing economist expectations. Fixed-asset investment declined further, accelerating to a 6.7% pace in the first seven months of the year, with real-estate investment falling 19.2%. The statistics bureau cited a complex external environment and weak domestic demand, exacerbated by adverse weather. New lending to Chinese borrowers saw a record net repayment of 590 billion yuan in July, indicating weakening confidence. Despite these challenges, luxury home sales in top-tier cities have seen a surge, and some smaller cities are outperforming major ones in per capita consumer spending. Economists suggest these weak figures may increase the likelihood of an interest-rate cut by the People's Bank of China.

China's economy is showing signs of an extended slowdown, with July data revealing a slump in industrial output and retail sales. Factory output grew 4.5% year-on-year, down from 5.3% in June and below forecasts. Retail sales increased by only 0.6%, a significant deceleration from June's 1% rise, despite summer tourism. These figures follow a weak quarterly growth rate in the three months to June, one of the lowest on record. The National Bureau of Statistics cited extreme weather as a disruption. The slowdown is increasing pressure on Beijing to implement measures to support economic activity, with Premier Li Qiang suggesting efforts to bolster overseas demand to compensate for weak domestic demand. Analysts anticipate a modest growth uptick later this year, supported by government spending measures.