China August data: industrial output, retail sales, investment due Tuesday

On Tuesday, September 15, at 0200 GMT, China's National Bureau of Statistics will publish August figures for industrial production, retail sales, and fixed asset investment. The release will provide the latest indication of whether the economy is stabilizing or deteriorating.

According to a poll of economists, industrial output is forecast to grow 4.8% year on year in August, recovering from July's 4.5% increase. That July reading had missed the same 4.8% forecast and slowed from June's 5.3% pace. Retail sales are seen rising 0.8% year on year, an improvement from July's 0.6% rise, which had fallen short of a Reuters poll estimate of 1.5% and decelerated from June's 1% growth. Some research notes take a more cautious view on consumption, predicting retail sales growth unchanged at around 0.6% year on year. They point to ongoing weakness in goods demand even as services spending, especially in leisure, entertainment and tourism, stays relatively strong.

Fixed asset investment is anticipated to deteriorate further. Year-to-date growth is projected at about minus 7.2% year on year, compared with minus 6.7% for the first seven months through July. The contraction is largely due to a deepening property slump, along with weaker private and infrastructure spending. This has occurred despite authorities expanding interest-subsidy programs and starting to direct funds through a policy-backed financing facility to assist local government projects.

The data arrives at a delicate time for policymakers. After July's broad shortfall, many analysts view the August figures as a gauge of whether Beijing must increase stimulus efforts. Another weak release would probably strengthen demands for stronger fiscal support. Officials have stressed implementing current measures rather than unveiling new ones, and it is unclear whether another disappointing batch of data will alter their stance.

Asian equity and currency markets will watch the figures closely, as China serves as a regional growth indicator. However, the initial market response is expected to depend on the retail sales data, because of the growing gap between forecasts and actual results for that metric recently.