China’s August economic data were more constructive than July’s, with retail sales returning to y/y growth and industrial value-added growth outperforming expectations. The recovery remains a narrow one, with only a limited subset of industrial output and retail sales components rebounding. Credit growth decelerated outside of government bond issuance, and property sector activity appears to be weakening in response to new regulatory measures targeting developers’ balance sheet growth. Both factors suggest slowing cyclical momentum in the coming months.
