China's economy slows more than expected, with sharp slump in investment

Policymakers likely to roll out more stimulus to ensure growth hits official target

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China's economic activity slowed more than expected across the board with a sharp slump in investment, adding to the likelihood that policymakers will roll out more stimulus to ensure growth stays on track to hit the official target.

Industrial output and consumption had their worst month yet in 2025 after a sharp slowdown in July. Production at Chinese factories and mines expanded 5.2 per cent in August from a year earlier, according to data from the National Bureau of Statistics (NBS) on Sept 15, the smallest gain since August 2024. Retail sales grew 3.4 per cent on year in August, slower than an expectation for an increase of 3.8 per cent and down from 3.7 per cent in the previous month.

Expansion in fixed asset investment in the first eight months of the year decelerated sharply to 0.5 per cent, the worst reading for the period since 2020.

The data "confirms a sharp slowdown in the second half of 2025, especially on the investment side," said Mr Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong.