16/08/2025

BIZ & FINANCE SATURDAY | AUG 16, 2025 Shein’s 2024 UK sales surge to £2b

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China factory, retail slump hits economy

BEIJING: China’s factory output growth slumped to an eight-month low in July, while retail sales slowed sharply, raising pressure on policymakers to roll out more stimulus to revive domestic demand and ward off external shocks to the US$19 trillion (RM79 trillion) economy. The underwhelming indicators come as officials navigate pressure on multiple fronts ranging from US President Donald Trump’s trade policies to extreme weather, excessive competition in the domestic market, and chronic weakness in the property sector. Industrial output grew 5.7% year on-year in July, National Bureau of Statistics (NBS) data showed yesterday, the lowest reading since November 2024, and compared with a 6.8% rise in June. It missed forecasts for a 5.9% increase in a Reuters poll. Retail sales, a gauge of consumption, expanded 3.7% in July, the slowest pace since December 2024, and cooling from a 4.8% rise in the previous month. They missed a forecast gain of 4.6%. A temporary trade truce reached between China and the US in mid May, which was extended by another 90 days this week, has prevented US tariff rates on Chinese goods from returning to prohibitively high levels. However, Chinese manufacturers’ profits continue to take a hit from subdued demand and factory-gate deflation at home. “The economy is quite reliant on government support, and the issue is those efforts were ‘front-loaded’ to the early months of 2025, and by now their impact has somewhat

negative contribution in the January March period. The US imposed 25% tariffs on automobiles and auto parts in April and threatened 25% levies on most of other Japanese imports. It later struck a trade deal in July that lowered tariffs to 15% in exchange for a US-bound US$550 billion (RM2.3 trillion) Japanese investment package. Japanese economy minister Ryosei Akazawa told a press conference that the latest GDP results confirmed that the country’s economy was recovering modestly. – Reuters LONDON: Shein’s British business made £2.05 billion (RM11.6 billion) in sales in 2024, a 32.3% increase from the previous year, a filing by the online fast fashion retailer showed early yesterday. Shein does not report global results publicly, but the filing sheds light on its growth in Britain, its third-biggest market after the US and Germany, as the company works toward an initial public offering in Hong Kong. Founded in China and headquartered in Singapore, Shein has spent years attempting to list, first in New York and then in London, but faced criticism from US and UK politicians and failed to get approval from China’s securities regulator for the offshore IPO at a time of increasing tensions between China and the US. The global retailer’s UK business, Shein Distribution UK Ltd, reported a pretax profit of £38.25 million in 2024, up 56.6% from £24.4 million in 2023. In the filing, Shein highlighted 2024 milestones, such as a pop-up shop in Liverpool, a Christmas bus tour across 12 UK cities and the opening of two new offices in Kings Cross and Manchester. Known for deeply discounted prices, Shein runs constant promotions and offers coupons or rewards that encourage shoppers to keep buying. Shein has taken market share from retailers like ASOS and H&M as surging inflation dented consumers’ spending power. – Reuters

Officials worry overcapacity among Chinese manufacturers and the price cuts made to clear stock are raising expectations among consumers, who are showing few signs of loosening their purse strings, for ever cheaper goods. China’s new yuan loans contracted in July for the first time in 20 years, separate bank lending data showed on Wednesday, pointing to weak private sector demand. A protracted slowdown in the nation’s crucial property sector, a key store of household wealth, continues to put pressure on consumer spending. New home prices extended a stagnant phase for over two years, falling 2.8% in July year-on-year, versus a 3.2% drop in June. “The accelerating downturn in property prices in the past few months signals that further policy support is needed,” Lynn Song, ING’s chief economist for Greater China, said in a note. Economic activity has also been impacted by extreme weather, from record-breaking heat to storms and floods across the country, disrupting factory production and day-to-day business operations. – Reuters

o Weak demand, property downturn and global headwinds raise calls for fresh stimulus to meet growth target

faded out,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. That policy support has helped the world’s second-largest economy avoid a widely anticipated sharp slowdown, along with factories taking advantage of the US-China trade truce to front-load shipments, but analysts say weak demand at home and global risks will drag on growth in coming quarters. Yesterday’s data drew a mixed reaction from investors, with Chinese blue chips up 0.5% and Hong Kong stocks down 1.1% in afternoon trading. Fixed asset investment grew just 1.6% in the first seven months of the year from the same period last year, compared with an expected 2.7% rise. It had expanded 2.8% in the first half. “Firms may be running on existing capacity rather than building new plants,” said Yuhan

Zhang, principal economist at The Conference Board’s China Centre. “The July industrial value-add breakdown tells a more nuanced story than the weak fixed asset investment headline,” he added, pointing to China’s automobile manufacturing, railway, shipbuilding, aerospace and other transport equipment industries as “outliers (that) indicate policy driven, high-tech and strategic sectors are still attracting substantial capital.” Beijing has recently stepped up policy measures and made pledges to prop up domestic consumption and curb excessive price competition, as authorities strive to lift economic growth towards the government’s 2025 target of around 5%. The government’s renewed crackdown on “disorderly” competition will help prices recover, Fu Linghui, a spokesman for the NBS told reporters following the data release.

Japan’s Q2 GDP beats forecasts on strong exports TOKYO: Japan’s economy grew much faster than expected in the second quarter as export volumes held up well against new US tariffs, giving the central bank some of the conditions it needs to resume interest rate hikes this year. months, especially as automakers struggle to keep prices down for American customers. expenditure and compared with median market expectations for a 0.4% gain in a Reuters poll. It followed a 0.6% rise in the previous quarter, which was revised up from a 0.2% contraction.

with a market estimate of a 0.1% increase. It grew at the same pace as the previous quarter. Consumption and wage trends are factors the Bank of Japan is watching to gauge economic strength and determine the timing of its next interest rate action. Capital spending, a key driver of domestic demand, rose 1.3% in the second quarter, versus a rise of 0.5% in the Reuters poll. Net external demand, or exports minus imports, contributed 0.3 of a point to growth, versus a 0.8 point

“The April-June data masked the real effect of Trump’s tariffs,“ said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute. “Exports were strong thanks to solid car shipment volumes and last-minute demand from Asian tech manufacturers ahead of some sectoral tariffs. But these aren’t sustainable at all.” The increase in GDP was helped by surprisingly resilient exports and capital

The reading translates into a quarterly rise of 0.3%, better than the median estimate of a 0.1% uptick. The strong data contrasts with China, which saw factory output growth hit an eight month low and retail sales slow sharply in July. Private consumption, which accounts for more than half of Japan’s economic output, rose 0.2%, compared

GDP rose 1% on an annualised basis, government data showed yesterday, marking the fifth straight quarter of expansion after the previous quarter’s contraction was revised to growth. However, analysts warn global economic uncertainties fuelled by US tariffs could weigh on the world’s fourth-largest economy in the coming