China: Economy sluggish – but these stocks are booming

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Fresh economic data from China signal a slowdown in the economy. Key indicators such as retail sales, industrial production, and fixed asset investment fell short of analysts' expectations in August. Nevertheless, the Chinese stock market defied the negative news at the start of the week and began the new trading week with gains.

Specifically, retail sales climbed by 3.4 percent year-on-year in August, the National Bureau of Statistics (NBS) announced on Monday. Analysts had expected an increase of 3.9 percent, compared to 3.7 percent in July.

Excluding the auto sector, growth was 3.7 percent. Rural areas performed particularly strongly, with an increase of 4.6 percent, while urban centers declined. Outstanding categories were jewelry (up 16.8 percent), sports and entertainment products (up 16.9 percent), and furniture (up 18.6 percent). In contrast, sales of petroleum, tobacco, and alcoholic beverages stagnated.

Industrial production falls to 12-month low

Industrial production grew by only 5.2 percent in August, down from 5.7 percent in July—the weakest figure since August 2024. Analysts had expected no change compared to the previous month. The restrictive measures against industrial overcapacity are significantly dampening production.

Unemployment rate increases

The unemployment rate in urban areas rose to 5.3 percent (previous month: 5.2 percent), which the NBS attributes to the university graduation period. At the same time, the consumer price index unexpectedly fell by 0.4 percent in August, while deflation in producer prices continues. NBS spokesperson Fu Linghui pointed to uncertainties caused by "imported inflation," such as a weaker yuan or rising commodity prices.

At the start of the week, the CSI 300 gained around 0.4 percent following the data release. Chinese technology stocks are also posting significant gains: Alibaba is up three percent in Hong Kong, Xiaomi is up 1.6 percent, and NetEase is soaring by 1.8 percent. The DER AKTIONÄR China Tech Giants Index is also expected to benefit from this.

Chinese stock markets are defying the poor economic data and following the positive guidance from Wall Street. Find out which three Chinese companies investors should keep an eye on now and which warrants offer gains of up to 350 percent by the end of the year in the stock report "China-Knaller 2.0" by AKTIONÄR expert Michael Diertl.

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