China’s industrial output increased by 4.8% in July 2019 which is the lowest reading since February 2002. This reading is 150 basis points below the June 2019 growth of 6.3%. The industrial output is a measure of the manufacturing production of a country. On the other hand, retail sales rose by 7.6% in July which implies that con-sumer activity is slightly more buoyant than industrial activity presently.
China’s GDP grew by 6.2% year over year as at July 2019 which is the slowest pace in over 25 years. This is against the backdrop of increased trade tensions between the US and China which has led to increased tariffs on goods traded between these countries. We are of the view that China’s growth is likely to continue to slow going into 2020 based on these factors, thus, the Central Bank could provide monetary stimulus to support growth over the next four quarters.