An industrial slowdown and rising inflation cast doubt on the stability of Asian markets. According to Anadolu, China's industrial production in July fell by more than 5.3%, surpassing the 4.5% annual growth forecast. This decline represents a significant deviation from the planned path, marking a turning point for the country's economy.

The data shows that consumer spending and urban investments have contracted, while employment rose to 5.2% in July, up from 5% in the previous month. This situation clearly indicates weakening domestic demand and weakness in the real estate sector. The People's Bank of China announced that, due to these signals of weakness, it might decide to cut interest rates.

The decision to cut rates is seen as a direct response to concerns that economic growth is losing its pace. Retail sales in China rose only by 0.6% in July, below expectations, while fixed asset investments plummeted by 6.7% in the same period. These numbers confirm deceleration in demand and contraction in the real estate sector, which saw a 19.2% annual decline.

Sadi Kaymaz, an analyst of Asian markets, noted that industrial production remains relatively resilient due to a 30% increase in industrial robot production and a 21% increase in integrated circuit production. However, this resilience stops almost everywhere except in high-tech sectors. Kaymaz noted that extreme weather events last month hit logistics and warehousing centers in various Chinese regions, worsening the situation.

Government officials might consider July's data as a temporary setback and wait for August data to better assess the situation. According to Kaymaz, economic growth might not reach the 4.5% target and could drop to around 4%. Premier Li Qiang called for accelerating new growth drivers, but the Politburo did not announce stimulus measures, indicating that the priority is qualitative assessment rather than quantitative numbers.