China: High-tech sectors cushion broader slowdown – ING
According to ING’s Lynn Song, Chinese industrial production growth slowed more than expected in July but remains relatively resilient compared with other domestic indicators. Manufacturing and high-tech manufacturing continue to outperform, with strong gains in electronics, rail, aerospace, robotics, NEVs and semiconductors. Traditional property and infrastructure-linked sectors such as cement, steel and flat glass remain weak, reflecting the ongoing property downturn.
Upgrading and external demand support industry
"Industrial production rose 4.5% YoY in July, slowing from 5.3% in June and falling short of forecasts for a smaller moderation (market: 5.0%, ING: 5.0%). This brought year-to-date industrial production growth to 5.3% YoY, slightly lower than the 5.4% recorded in the first half, but still relatively resilient compared with other domestic activity indicators."
"Manufacturing continued to outperform the headline, growing 5.5% YoY in July, while high-tech manufacturing accelerated to 16.9% YoY, up from 14.1% in June. This reinforces the structural theme that China’s industrial growth is increasingly being driven by industrial upgrading and high-tech manufacturing, the strategic priorities for the country."
"The product-level industrial production data also point to continued strength in new economy sectors. Industrial robots rose 30.2% YoY, new energy vehicles rose 29.9% YoY, and semiconductor integrated circuits rose 20.7% YoY, This supports the view that the industrial cycle is being increasingly supported by robotics, semiconductors, NEVs and higher-end manufacturing."
"In contrast, traditional property and infrastructure-linked sectors remained weak. Cement output fell -11.6% YoY, steel products fell -4.1% YoY, and flat glass declined -3.6% YoY, underscoring the continued drag from the old property and construction-related industrial cycle."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
