China's Economy Shows Stable Improvement in July, SIC Data Reveals

High-frequency data from China’s State Information Center (SIC) on Saturday indicated that the country’s economy showed stable improvement across various sectors in July, with offline consumption growing steadily, investment structure improving, and innovation remaining robust. Offline consumption payments rose 2.2 percent year on year (yoy) in July, an increase of 0.8 percentage points from the previous month. Meanwhile, payments for household appliances and audio-visual equipment surged 8.5 percent, with the growth rate increasing by 10.9 percentage points compared to June. “The most positive change in consumption in July was that the recovery became more broad-based,” said Xing Yuguan, a researcher at the SIC. Xing explained that stable growth in offline consumption, a recovery in big-ticket item spending, and strong summer tourism activity helped boost consumption in major shopping areas, high street shops, and neighbourhood stores. Investment in high-end manufacturing surged 73.1 percent yoy in July, up 42.5 percentage points from June. Meanwhile, the value of contracts awarded for projects related to new infrastructure, including computing power, data, and networks, rose 0.8 percent yoy. Xing noted that the continuous improvement in investment structure and the strong flow of capital into sectors related to new quality productive forces reflected confidence in the prospects for industrial upgrading. On the industrial front, an index tracking production activity in industrial zones rose 1.0 percent yoy in July, indicating generally stable operations. Indices for semiconductors, new materials, and digital intelligence rose by 11.6 percent, 8.9 percent, and 4.8 percent, respectively. The number of approved patents related to strategic emerging industries climbed 60 percent yoy. Xing said the industrial activity data shows that companies in the semiconductor, new material, and digital intelligence sectors remain highly dynamic, while AI-related innovation is developing rapidly, providing strong impetus for the shift from old to new growth drivers in the industrial sector.