China’s economy looks feeble again. Analysts underscore a slowdown in China’s industrial production and unemployment rates. So, the economy needs urgent stimulus measures.

Referring to macroeconomic data by China’s National Bureau of Statistics, the key metrics of the national economy in August discouraged investors who had anticipated stability or even slight growth.

Industrial production increased by only 4.5% year-on-year last month following the 5.1% growth in July.  Analysts had predicted a rise of 4.7%. Experts also noted a significant decline in the agribusiness sector and ferrous metallurgy.

Moreover, unemployment surged to a record 5.3%. The jobless rate was 5.2% in July and 5% in June. The financial market situation only added fuel to the fire. Growth in fixed asset investment fell from 3.6% to 3.4%, and in the real estate sector, there was a slump of 10.2%.

As for consumption, retail sales also went down. They grew by only 2.1% in August compared to 2.7% a month ago. Analysts believe that the dynamics of the key components contributing to China’s GDP were negative. To sum up, the authorities’ goal of achieving a 5% GDP growth by the end of 2024 now seems unrealistic. Experts are convinced the authorities have to introduce urgent extra support measures.

The poor performance of China’s economy is a key driver of the downtrend in oil prices. Such a sharp drop has not been recorded in the last three years. The economic woes of the world’s largest crude oil importer are denting energy demand, which OPEC and its allies had been counting on. All in all, many analysts are pessimistic about China’s near-term outlook. Its economic growth is also hindered by a prolonged capital outflow, whereas Beijing is unable to stem the process through its current regulatory policies.