China’s industrial production in July grew at the slowest pace in 17 years, since February 2002. In the middle of the slowdown sparked by the US-China trade war, the retail sector also felt the pinch. Industrial production of China grew by 4.8 per cent year-on-year in the month of July, according to the National Bureau of Statistics on China. This is also less than the growth rate of 6.3 per cent in June. However, China’s new low in industrial production still surpassed the recent growth rate of India’s industrial production by a significant margin. India’s IIP grew a mere 2 per cent in June 2019, according to MOSPI. In the last eight months, the growth of industrial production of India has not crossed the 5 per cent mark.
The escalating trade dispute with the US, a slump in domestic demand and slow production for manufacturing and mining have pushed China to register the weakest growth in industrial output since February 2002, according to the National Bureau of Statistics on China. Despite the slowdown in industrial production, China managed to increase its exports by 10.3 per cent and total trade by 5.7 per cent year-on-year in July.
India has recently lost its ‘fastest growing economy’ tag to China after the Indian economy grew at a slower than expected pace in the quarter ending on March 31. Indian government and companies are looking at the US-China trade war as an opportunity to push India’s exports. However, the gap in the installed capacity of production and its utilisation between India and China is so wide that being a replacement of China is not a cakewalk.
Even amid slowdown, China’s growth rate in manufacturing remained 4.5 per cent, mining at 6.6 per cent, utilities at 6.6 per cent, ferrous metals at 10 per cent and the growth rate of transport equipment clocked at 15.7 per cent in the month of July, which are far more than the corresponding sectoral growth rates in India.