BEIJING, China - The Chinese economy is slowing faster than expected, new data released on Wednesday revealed.
Industrial output for July, according to the National Bureau of Statistics was expected to decline from 6.3% last year to 5.8%. However the figure came in at 4.8%, substantially below expectations.
"China's economy needs more stimulus because the headwinds are pretty strong and today's data is much weaker than consensus," Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong told the Reuters Thomson news agency on Wednesday.
"The economy is going to continue to slow down. At a certain point, policymakers will have to step up stimulus to support infrastructure and property. I think it could happen by the end of this year."
Exacerbating China's problems is the trade war with the United States, and a new round of tariffs to be applied from 1 September on around $150 billion worth of Chinese goods. The tariffs were originally to be imposed on $300 billion worth of goods, however U.S. President Donald Trump did an about-turn on this on Tuesday.
On Monday China re-set the yuan at a lower level drawing criticism from the U.S. which recently designated the country a currency manipulator.
With its economy sliding, which it has done now for a number of years, a corresponding slide in the yuan would be expected.
Stocks in China held their ground on Wednesday despite the disappointing data. In Shanghai, the composite index rose 0.44%, while the Hong Kong Hang Seng gained 0.08%.