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Chinese Economy Receives New Blow From Housing Slump

Official data from China’s government on Tuesday is expected to show that the nation’s economy is continuing to struggle to launch its economic rebound, with the property market expected to hamper economic growth. While industrial output, retail sales, and fixed-asset investment in July are expected to rise compared to a year ago, real estate investment is expected to decline.

As both property developer and private housing sales are expected to slump, the Chinese government pledged to implement several measures to support economic growth including monetary and fiscal stimulus. Still, the country has not yet instituted the same level of support as shown during previous economic downturns. A weaker yuan and high debt levels are expected to add to economic pressures.

“The economy needs more support. We see the central bank delivering it in the third quarter by freeing up more cash for banks to lend and trimming borrowing costs further,” Bloomberg Economics suggested. Still, China remains on track to achieving the government’s 5% economic growth target for the year.

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