DGermany looks to China: The country is the most important sales market for numerous German companies, and there are many hopes for the recovery after the corona pandemic. Now Beijing is coming out of weak economic data. Retail and industry developed weaker than expected in July. The disappointment caused Asia’s stock markets to stumble.
The Chinese statistical office announced on Monday that production in the industry had increased by 6.4 percent compared to the previous year. In June production had increased by 8.3 percent. Experts had expected a slight weakening, but only expected a decline to a growth of 7.9 percent.
The situation is similar for retail sales. This increased by 8.5 percent year-on-year in July after an increase of around 12 percent in June. Economists had expected an increase of almost 11 percent in July. Investments in property, plant and equipment from January to the end of July rose by 10.3 percent, after having risen by 12.6 percent by the end of June. Here, too, economists had a bigger increase on the list.
“Asia most threatened by the Delta variant”
The disappointment with the growth figures was evident on Asia’s stock exchanges. The Japanese Nikkei index lost 1.9 percent to 27,441 points. In contrast, the Shanghai stock exchange was up 0.3 percent. The index of the most important companies in Shanghai and Shenzen gained 0.2 percent.
“The low vaccination rates and low tolerance for the spread of the virus in the population suggest that Asia is the region most economically threatened by the Delta variant,” said Bruce Kasman, an analyst at the investment bank JP Morgan. Added to this is the uncertainty about the possible geopolitical effects of the sudden collapse of the Afghan government and the consequences for political stability in the region.
The weak data are another risk to the economic recovery from the corona shock last year. In view of new corona outbreaks with the delta variant and the recently weaker demand all over the world, this is on shaky feet. In addition, there were floods in some parts of China, which also caused problems in production.
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