July data softened across the board, with a notable drop in industrial output growth to the slowest rate in a non-holiday month since 1990, and producer prices also moved into deflationary territory. Shadow financing channels contracted sharply as the fallout from Baoshang Bank’s takeover continued to squeeze small banks. There are also signs that the trade war is weakening investment and output in sectors such as telecommunications and consumer electronics, and renewed policy tightening is hitting property construction as well.
