Global markets are still only half spooked by the swift decline in Chinese growth. As usual, it is the hope of MOAR that keeping things afloat. Goldman is typical:
1. Industrial production increased by 6.4% yoy in July, significantly less than expected. The weakness appears relatively broad-based. Activity growth in machinery manufacturing sector slowed on the back of export growth deceleration, and production in upstream industries such as metals smelting and pressing also continued to weaken amid tightened environmental regulations and policy controls. High tech manufacturing (such as industrial robot production which supported overall IP growth in June) was probably affected by the outbreak of the virus and related control measures around Nanjing towards the end of July.
2. Fixed asset investment (FAI) fell 0.5% yoy in July (on a single-month basis based on our estimates), well below expectations. Manufacturing investment growth decelerated sharply to 9.2% yoy in July (vs. 17.0% yoy in June). Property investment growth moderated further to 1.2% yoy in July (vs. 6.0% in June). Infrastructure investment declined by 9% yoy in July, reversing from +1.9% yoy in June. On a two-year average basis, FAI increased 2.8% per year from July 2019 to July 2021, well below the +5.4% pace for 2019 as a whole.
