Delta dents Chinese growth:

China’s retail sales rose at their slowest pace in 12 months as virus outbreaks continue to cast a pall on the Middle Kingdom’s economic prospects, says Thomas Hale in the Financial Times. Retail sales rose by just 2.5% in August year-on-year compared to forecasts of 7%. Industrial production grew by 5.3%, also lagging behind the 5.8% anticipated. Flooding, regulatory activism, new Covid-19 infections owing to outbreaks of the Delta variant in Nanjing in July and a property slowdown have all had an impact. Consumption was hit hard by all the disruption: catering and restaurant sales shrank by 4.5%, their first contraction since November 2020. China continues to maintain a zero-tolerance policy towards the virus, which makes its economy vulnerable to any local outbreaks because they will result in lockdowns. The property bubble is also starting to hiss air (see page 4).