China’s Economy Slows Broadly Even as Exports Keep Rising

The Chinese economy slowed noticeably in July, according to official statistics released on Friday, highlighting a complex set of challenges facing China amid growing global tensions over trade.

The government attributed the slowdown partly to the trade war with the United States, though China’s economy is still suffering the overhang of a four-year-long crash in real estate values. What’s more, officials recently have taken deliberate steps to slow its factories as many countries have begun imposing tariffs on China’s massive and still rising exports.

In July, industrial production, retail sales and investment faltered and fell short of economists’ expectations. Unemployment ticked up as millions of young people graduated from college and looked for work. Lackluster factory output was a particular surprise as the Chinese government had announced last week that exports were still growing strongly, with little effect so far from President Trump’s tariffs.

Fu Linghui, the spokesman and chief economist of China’s National Bureau of Statistics, speaking at a news conference, cited the tariffs and other factors.

“The international environment in July was complex and severe, with the continued impact of trade protectionism and unilateralism,” he said. He also cited a “short-term impact” from extreme weather, including flooding and heat waves.

Some of the economy’s deceleration appeared to be the expected result of government policies. Many companies have been engaging in frenetic price-cutting as they try to clear excess inventory. The Chinese government has responded by beginning to discourage further investment in industrial categories where many factories run at half or less of capacity, like those making cars or solar panels.

Investment in factories, office buildings and other fixed assets decelerated further in July and has barely risen in the first seven months of the year compared to the same period in 2024, according to the data from the National Bureau of Statistics.

Industrial production, which has been carrying the economy to a considerable extent over the last several years, was still up 5.7 percent in July from the same month last year. But that was a weaker pace than in June, when it was up 6.8 percent from a year earlier.

While Mr. Fu blamed U.S. protectionism, China’s exports actually rose 7.2 percent in July from a year earlier. China’s exports to Southeast Asia and Africa, two regions that do a lot of re-exporting to the United States, were particularly strong.

Exports directly to the United States slumped, although they were still more than three times China’s imports from the United States.

China’s housing market crash, which has erased much of the savings of the middle class, has made many households unwilling to buy cars, go to restaurants or engage in other spending. Apartment prices had leveled off last winter and into early spring after signals from the government that it might take action to stabilize the real estate sector. But prices have resumed declining in the past four months as few specific measures have been forthcoming.

Retail sales rose 3.7 percent in July compared to the same month last year, considerably worse than expectations and weaker than in June, when they were up 4.8 percent.

Zichun Huang, an economist at Capital Economics, a consulting firm, said in a note that while the government has announced a few measures in recent days to help households, these steps were not yet extensive enough to make a big difference.

“While recent measures such as childbirth and consumer loan subsidies are steps in the right direction, they are unlikely to meaningfully boost household spending,” she wrote.

Li You contributed research.