The latest Chinese trade and bank lending figures make it more likely there will be urgent pro-growth action by the Beijing government to stabilise the economy.
Exports in July were up by just one percent from a year ago and new loans were at their lowest in ten months.
That comes one day after we learned that China’s factory output rose at its lowest pace in three years and retail sales there were weak.
Excluding a fall in exports in January, the one percent rise in July is the weakest since November 2009. It marked a big pullback from annual growth in June of more than 11 percent. Shipments to the European Union dropped more than 16 percent.
Net new bank lending in July of just 540 billion yuan versus expectations of 690 billion yuan is a big potential cause of concern.
Bank loans are the main credit creation mechanism in the economy, which is only in the early stages of reforming capital markets to boost available sources of corporate finance.
Beijing has refused to describe its pro-growth policy tweaks since the autumn of last year as stimulus, calling it a process of “fine-tuning” – albeit one that has fast-tracked state-funded infrastructure projects.
Fine-tuning has so far failed to convincingly arrest the slide in expansion that is likely this year to see China chalk up its slowest full-year of growth since 1999, at eight percent according to economists polled by Reuters.