THE country reported a surprise drop in industrial output growth to a more than 17-year low yesterday, underlining widening economic cracks amid trade tensions with the United States.

Industrial output grew 4.8 percent in July from a year earlier, data from the National Bureau of Statistics showed yesterday, lower than the most bearish forecast in a recent poll.

Analysts had forecast industrial output growth would slow to 5.8 percent, from June’s 6.3 percent growth, amid weakened demand at home and abroad.

Despite more than a year of growth boosting measures, yesterday’s data showed China’s domestic demand remains sluggish, with gloomy July factory surveys, stubbornly soft imports and weaker-than-expected bank lending data released in recent days reinforcing views that the government needs roll out more stimulus soon to support the economy.

Retail sales growth was also weaker than the most pessimistic forecast, after a jump in July that many analysts had predicted would be temporary.

Retail sales rose 7.6 percent in July from a year earlier, compared with 9.8 percent in June and analysts’ expectations of 8.6 percent.

Fixed-asset investment rose 5.7 percent in the January-July period from the same period last year, lagging expectations of a 5.8 percent gain, the same as the first six months of the year.

But investment readings by sector showed a more marked loss of momentum in key sectors at the start of the third quarter.

Private sector fixed-asset investment, which accounts for about 60 percent of the country’s total investment, grew 5.4 percent in the January-July period, compared with a 5.7 percent rise in the first sixth months of 2019.

Investors fear a longer and costlier trade war between the world’s two largest economies could trigger a global recession.

China’s industry ministry said in late July that the country would need “arduous efforts” to achieve 2019’s industrial output growth target of 5.5 percent to 6.0 percent, citing trade protectionism pressures.

Analysts say China will need to deliver more stimulus to prevent a deeper downturn and to help stabilize growth.(SD-Agencies)