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Lower US tariffs on Japanese autos are set to take effect this week, a Commerce Department notice confirmed Monday, as Washington implements a recent trade pact it had negotiated with Tokyo.Starting Tuesday, Japanese autos entering the United States will face a 15-percent tariff instead of 27.5 percent, providing manufacturers some reprieve from President Donald Trump’s fresh duties this year.Since returning to the presidency in January, Trump has targeted specific sectors with tariffs, and imported automobiles and parts face a 25-percent duty.This dealt a blow to Japanese automakers, for whom the 25-percent duty piled atop an existing 2.5-percent tariff — bringing the overall level to 27.5 percent.For goods falling outside specifically targeted sectors, Trump has also imposed a separate 10-percent duty on imports from nearly all trading partners since returning to the presidency.In early August, he hiked the 10-percent rate to various higher levels for goods from dozens of economies, including the European Union and Japan.The move left Japanese products facing a 15-percent US tariff tacked onto existing duties for many goods.While the two countries had initially unveiled a trade pact in July, they appeared to diverge in their understanding of its details, such as whether the duties would generally stack on existing tariffs for certain products.Japan’s tariffs envoy Ryosei Akazawa previously told reporters that Washington was expected to revise the rule.The new US order taking effect Tuesday will see a 15-percent tariff cap instead for many products, applying retroactively to August 7.Under the terms of the US-Japan tariff deal, Japan is also expected to make investments worth $550 billion in the United States, according to the White House.

Stock markets mostly rose Monday as traders geared up for an expected interest rate cut by the US Federal Reserve this week.Sentiment was also boosted by news that the United States and China have reached a framework deal over their TikTok dispute, which the US side said will be finalized by President Donald Trump and Chinese leader Xi Jinping on Friday.On Wall Street the S&P 500 and Nasdaq pushed to fresh records, while Europe’s main markets ended mostly higher.Equities have enjoyed a strong run-up over recent weeks as a string of data on jobs and inflation are seen as having provided the US central bank with enough leeway to resume its rate reductions.Wednesday’s policy decision would follow figures showing the labor market has continued to soften, while prices have not spiked as much as feared in the wake of Trump’s tariff war.The Fed is expected to lower borrowing costs by 25 basis points, although some observers predict it could go to 50 points.”Overall, today’s price action suggests that there is optimism across financial markets,” said Kathleen Brooks, research director at XTB trading platform.”Stocks look to be rallying into this Fed meeting, as hopes remain high that the Fed will burnish their dovish credentials and signal multiple rate cuts in the coming months on Wednesday,” she added.The dollar slid against its major rivals, and City Index and FOREX.com analyst Fawad Razaqzada said traders will be listening for phrases from the Fed like inflation being “well anchored” or the labor market “cooling more than expected,” signaling more cuts ahead. The central banks of Canada, Britain and Japan are also due to meet this week.Prospects for defusing trade tensions between the world’s top two economies improved as US Treasury Secretary Scott Bessent said Monday that a “framework” for a deal to settle a dispute over TikTok had been reached with China.He said Trump and Xi will speak on Friday to “complete” the agreement, after Washington’s pressure to have the video-sharing app find a non-Chinese buyer or face a US ban.Bessent was speaking after a second day of talks with Chinese officials in Madrid that included discussions on the US-China trade dispute.Trump said the talks were going “VERY WELL” in a Truth Social post, adding that he would speak to Xi on Friday.Trade tensions between Beijing and Washington escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains.Both governments have since agreed to a de-escalation, with the United States imposing 30-percent duties on imports of Chinese goods and China hitting US products with a 10-percent levy. But the temporary truce expires in November.Asia equities fluctuated and Shanghai edged down after data showed further weakness in China’s economy — with growth in retail sales and industrial production much slower than forecast.Shares in Tesla closed 3.6 percent up after regulatory filings showed CEO Elon Musk bought about $1 billion worth of shares in the electric car manufacturer.- Key figures at around 2015 GMT -New York – Dow: UP 0.1 percent at 45,883.45 points (close)New York – S&P 500: UP 0.5 percent at 6,615.28 (close)New York – Nasdaq Composite: UP 0.9 percent at 22,348.75 (close)London – FTSE 100: DOWN less than 0.1 percent at 9,277.03 (close)Paris – CAC 40: UP 0.9 percent at 7,896.93 (close)Frankfurt – DAX: UP 0.2 percent at 23,748.86 (close)Tokyo – Nikkei 225: Closed for a holidayHong Kong – Hang Seng Index: UP 0.2 percent at 26,446.56 (close)Shanghai – Composite: DOWN 0.3 percent at 3,860.50 (close)Euro/dollar: UP at $1.1768 from $1.1731 on FridayPound/dollar: UP at $1.3609 from $1.3560Dollar/yen: DOWN at 147.38 yen from 147.67 yenEuro/pound: DOWN at 86.47 pence from 86.52 penceWest Texas Intermediate: UP 1.0 percent at $63.30 per barrelBrent North Sea Crude: UP 0.7 percent at $67.44 per barrelburs-rl-bys/mlm

The United States and China announced a “framework” deal on Monday to resolve their dispute over TikTok that calls for the Chinese-owned app to pass to US-controlled ownership.In a social media post, US President Donald Trump said — without directly naming the social media giant — that a deal was reached with a “certain company that young people in our Country very much wanted to save. They will be very happy!”Trump added on his Truth Social network that he would speak to Chinese President Xi Jinping on Friday.A senior Chinese official said the two sides “reached a basic framework consensus on resolving issues related to TikTok through cooperation, reducing investment barriers and promoting relevant economic and trade cooperation.””China will firmly safeguard the national interests, the legitimate rights and interests of Chinese enterprises,” Xinhua quoted Vice Minister of Commerce Li Chenggang as saying.The deal came after a second day of talks between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Madrid, which also includes discussions about the wider US-China trade dispute.Bessent confirmed the framework deal, but declined to give further details, saying Trump and Xi will speak on Friday to “complete” the agreement.TikTok — which boasts almost two billion global users — is owned by China-based internet company ByteDance.A federal law requiring TikTok’s sale or ban on national security grounds was due to take effect the day before US President Donald Trump’s inauguration on January 20. But the Republican, whose 2024 election campaign relied heavily on social media and who has said he is fond of TikTok, put the ban on pause.In mid-June Trump extended a deadline for the popular video-sharing app by another 90 days to find a non-Chinese buyer or be banned in the United States. That extension is due to expire on Wednesday.- ‘Questions unanswered’ -While Trump had long supported a ban or divestment, he reversed his position and vowed to defend the platform after coming to believe it helped him win young voters’ support in the November election.Sarah Kreps of Cornell University’s Tech Policy Institute warned “national security questions remain unanswered,” noting the deal leaves data and algorithm safeguards unclear.The talks in Madrid also cover Trump’s threat of steep tariffs on Chinese imports.In his Truth Social post on Monday, Trump said the meeting in Europe “has gone VERY WELL!” and added: “The relationship remains a very strong one!!!”Trade tensions escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains.Both governments later agreed to lower their punitive tariffs, with the United States imposing 30 percent duties on imports of Chinese goods and China hitting US products with a 10 percent levy, but the temporary truce expires in November.The US-China trade truce has been an uneasy one, with Washington accusing Beijing of violating their agreement and slow-walking export license approvals for rare earths, key materials for the automotive, electronics and defense industries.- Nvidia probe -China on Saturday launched two investigations into the US semiconductor sector. Beijing opened an anti-dumping probe into some highly specialized chips originating from the United States, its commerce ministry said.  The ministry also said in a separate statement it will launch an investigation into whether the United States had discriminated against the Chinese chip sector.And on Monday China said an investigation found US chip giant Nvidia had run afoul of the country’s antitrust rules, and vowed an additional probe.The statement did not provide further details about Nvidia’s alleged legal violations or the further probe.Top diplomats and defense chiefs from both nations held back-to-back phone calls last week, which analysts said could mark a step towards a meeting between Trump and Xi.

The United States announced Monday a “framework” deal with China to resolve their dispute over TikTok that calls for the Chinese-owned app to pass to US-controlled ownerhip.In a social media post, US President Donald Trump said — without directly naming the social media giant — that a deal was reached with a “certain company that young people in our Country very much wanted to save. They will be very happy!”Trump added on his Truth Social network that he would speak to Chinese President Xi Jinping on Friday.US Treasury Secretary Scott Bessent announced the agreement after a second day of talks with Chinese Vice Premier He Lifeng in Madrid, which also includes discussions about the wider US-China trade dispute.”We have a framework for a TikTok deal,” Bessent told reporters, adding it calls for the app “to switch to US-controlled ownership”.”It’s between two private parties, but the commercial terms have been agreed upon,” he said.Bessent declined to give further details, saying Trump and Xi will speak on Friday to “complete” the agreement.TikTok — which boasts almost two billion global users —  is owned by China-based internet company ByteDance.A federal law requiring TikTok’s sale or ban on national security grounds was due to take effect the day before US President Donald Trump’s inauguration on January 20. But the Republican, whose 2024 election campaign relied heavily on social media and who has said he is fond of TikTok, put the ban on pause.In mid-June Trump extended a deadline for the popular video-sharing app by another 90 days to find a non-Chinese buyer or be banned in the United States. That extension is due to expire on Wednesday.- ‘Questions unanswered’ -While Trump had long supported a ban or divestment, he reversed his position and vowed to defend the platform after coming to believe it helped him win young voters’ support in the November election.Sarah Kreps of Cornell University’s Tech Policy Institute warned “national security questions remain unanswered”, noting the deal leaves data and algorithm safeguards unclear.The talks in Madrid also cover Trump’s threat of steep tariffs on Chinese imports.In his Truth Social post on Monday, Trump said the meeting in Europe “has gone VERY WELL!” and added: “The relationship remains a very strong one!!!”Trade tensions escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains.Both governments later agreed to lower their punitive tariffs, with the United States imposing 30 percent duties on imports of Chinese goods and China hitting US products with a 10 percent levy, but the temporary truce expires in November.The US-China trade truce has been an uneasy one, with Washington accusing Beijing of violating their agreement and slow-walking export license approvals for rare earths, key materials for the automotive, electronics and defence industries.- Nvidia probe -China on Saturday launched two investigations into the US semiconductor sector. Beijing opened an anti-dumping probe into some integrate circuit chips originating from the United States, its commerce ministry said in a statement. The ministry also said in a separate statement it will launch an investigation into whether the United States had discriminated against the Chinese chip sector.And on Monday China said an investigation found US chip giant Nvidia had run afoul of the country’s antitrust rules, and vowed an additional probe.The statement did not provide further details about Nvidia’s alleged legal violations or the further probe.Beijing — which announced the investigation in December — is currently engaged in an intense contest with the United States for supremacy in the critical field of semiconductors.Top diplomats and defence chiefs from both nations held back-to-back phone calls last week, which analysts said could mark a step towards a meeting between Trump and Xi.

Stock markets were mixed on Monday as traders geared up for an expected interest rate cut by the US Federal Reserve this week.Equities have enjoyed a strong run-up over recent weeks as a string of data on jobs and inflation are seen as having provided the US central bank with enough leeway to resume its rate reductions.Wednesday’s policy decision follows figures showing the labour market continuing to soften, while prices have not spiked as much as feared in the wake of US President Donald Trump’s tariff war.The keenly awaited meeting is expected to see the Fed lower borrowing costs 25 basis points, although some observers predict it could go to 50 points.”There’s a wait and see mood at the start of the week as investors eye key central bank meetings and assess the potential path of interest rate cuts,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.The central banks of Canada, Britain and Japan are due to meet this week.Paris and Frankfurt stock markets advanced in midday trading on Monday, while London was flat.Asia fluctuated after a tepid Friday on Wall Street that saw the Nasdaq inch up to a new peak.Shanghai edged down after data showed further weakness in China’s economy, with growth in retail sales and industrial production much slower than forecast.Seoul hit another record after South Korean officials scrapped a plan to lower the capital gains tax threshold for stock investors.Hong Kong advanced, while Tokyo was closed for a holiday.Also in view are talks between China and the United States in Madrid that will cover a range of issues including trade, with an eye on a November deadline for their tariff pause.US Treasury Secretary Scott Bessent said Monday the United States is “very close” to a deal with China to settle their dispute over TikTok. The meetings are expected to continue through Wednesday — the deadline for TikTok to find a buyer or face a ban.The negotiations come after China launched two investigations into the US semiconductor sector on Saturday.In company news, Hong Kong-listed Pop Mart, which makes the global smash Labubu dolls, tanked more than six percent, wiping billions off its valuation, after JP Morgan downgraded it saying it was overpriced.The firm is up around 180 percent this year but is down more than a fifth from its August record owing to signs demand for the dolls is waning.And in Sydney, ANZ bank, one of Australia’s “big four” lenders, retreated following news it had agreed to pay a record fine of Aus$240 million (US$159.5 million) over “widespread misconduct”.- Key figures at around 1050 GMT -London – FTSE 100: FLAT at 9,284.41 pointsParis – CAC 40: UP 1.1 percent at 7,914.17Frankfurt – DAX: UP 0.4 percent at 23,792.03Tokyo – Nikkei 225: Closed for a holidayHong Kong – Hang Seng Index: UP 0.2 percent at 26,446.56 (close)Shanghai – Composite: DOWN 0.3 percent at 3,860.50 (close)New York – Dow: DOWN 0.6 percent at 45,834.22 points (close)Euro/dollar: UP at $1.1756 from $1.1731 on FridayPound/dollar: UP at $1.3606 from $1.3560Dollar/yen: DOWN at 147.35 from 147.67 yenEuro/pound: DOWN at 86.40 pence from 86.52 penceWest Texas Intermediate: UP 0.2 percent at $62.82 per barrelBrent North Sea Crude: UP 0.1 percent at $67.09 per barrel

The World Trade Organization’s agreement on fisheries subsidies — its first environmentally focused accord — entered into force on Monday after years of thorny negotiations at a time of heightened international trade tensions.Agreed by more than 100 WTO members, including the United States, the European Union and China, the agreement sets binding rules requiring governments to consider the legality and sustainability of the fishing activities they subsidise.”This is the first sustainability agreement of the WTO… It’s a big day,” WTO chief Ngozi Okonjo-Iweala told AFP.Speaking to diplomats during Monday’s ceremony, she described the event as a “historic milestone”.”It seems like a dream,” she said. “We have been waiting a long time for today to happen.” The discussions towards the deal began all the way back in 2001, with WTO members finally reaching an agreement by consensus in June 2022.Below are the main points of the agreement, which was celebrated with a ceremony at the WTO’s Geneva headquarters Monday after being ratified by two-thirds of the membership.Broader rules regarding subsidies for activities that contribute to overcapacity and overfishing remain under negotiation.- Bans -“Each year, governments spend an estimated $22 billion in harmful subsidies that contribute to overfishing and the depletion of marine resources,” Okonjo-Iweala said.The deal bans subsidies to any vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing, or the fishing of overexploited stocks.However, a country can grant or maintain subsidies implemented “to rebuild the stock to a biologically sustainable level”.According to the United Nations, IUU fishing is responsible for depleting between 11 million and 26 million tonnes of fish each year, which “represents 20 percent of the global fish catch”, the WTO chief said.The agreement also prohibits subsidies for unregulated fishing on the high seas, including areas outside the jurisdiction of coastal countries.The agreement “is a significant step forward for the ocean and the coastal communities that depend on it,” said Megan Jungwiwattanaporn, with the Pew Charitable Trusts.- Notification and dispute settlement -The agreement says countries must “take special care and exercise due restraint” when granting subsidies to vessels not flying their own flag, and when granting them to fishing or related activities if the status of the stocks concerned is unknown.Besides regular notifications of subsidies, WTO members are required to update the organisation on how the agreement is being implemented.This includes the status of fish stocks, information on vessels receiving subsidies, and a list of vessels and operators that the country has determined to be engaged in IUU fishing.In the event of disagreements, countries can refer matters to the WTO’s dispute settlement body.- Developing countries -The agreement provides a “peace clause” to the world’s least-developed countries (LDCs) and developing countries, exempting them from subsidy bans within their own exclusive economic zones for two years.Furthermore, developing countries and LDCs whose annual share of the global fish catch does not exceed 0.8 percent can submit their fisheries notifications to the WTO every four years instead of every two years.They will also benefit from technical assistance, and the WTO has set up a special fund to support them, which to date has received $18 million in voluntary contributions.- Agreement could be thrown overboard -The agreement alone “won’t stop the billions in subsidies that fuel overfishing and overcapacity”, warned Rashid Sumaila, a member of NGO Oceana’s board and head of Fisheries Economics Research Unit at the University of British Columbia.And if the second agreement outlining comprehensive rules on overcapacity and overfishing is not adopted within four years, the first agreement will be “immediately terminated”, unless WTO members decide otherwise.

The United States is “very close” to a deal with China to settle their dispute over TikTok, US Treasury Secretary Scott Bessent said Monday as the two sides resumed trade talks in Madrid.Bessent and Chinese Vice Premier He Lifeng opened the latest round of discussions in Madrid on Sunday, seeking to narrow differences on trade and technology that have strained relations between the world’s two largest economies.The meetings are expected to continue through Wednesday — the deadline for TikTok to find a buyer or face a ban.”On the TikTok deal itself, we’re very close to resolving the issue,” Bessent told reporters as he arrived at Spain’s foreign ministry for a second day of talks. “If we don’t reach an agreement on TikTok, it doesn’t affect the overall relationship between the two countries. It’s still very good at the highest levels,” he added.TikTok is owned by China-based internet company ByteDance.A federal law requiring TikTok’s sale or ban on national security grounds was due to take effect the day before US President Donald Trump’s inauguration on January 20. But the Republican, whose 2024 election campaign relied heavily on social media and who has said he is fond of TikTok, put the ban on pause. – Shaky truce -In mid-June Trump extended a deadline for the popular video-sharing app by another 90 days to find a non-Chinese buyer or be banned in the United States. That extension is due to expire on Wednesday.While Trump had long supported a ban or divestment, he reversed his position and vowed to defend the platform — which boasts almost two billion global users — after coming to believe it helped him win young voters’ support in the November election.Beijing’s commerce ministry called on Washington on Friday to “work with China on the basis of mutual respect and equal consultations, to resolve each other’s concerns through dialogue and find a solution to the problem”.The talks in Madrid also cover Trump’s threat of steep tariffs on Chinese imports.Trade tensions escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains.Both governments later agreed to lower their punitive tariffs, with the United States imposing 30 percent duties on imports of Chinese goods and China hitting US products with a 10 percent levy, but the temporary truce expires in November.The US-China trade truce has been an uneasy one, with Washington accusing Beijing of violating their agreement and slow-walking export license approvals for rare earths.China is the world’s leading producer of rare earths, used to make magnets essential to the automotive, electronics and defence industries.- Nvidia probe -China on Saturday launched two investigations into the US semiconductor sector. Beijing opened an anti-dumping probe into some IC chips originating from the United States, its commerce ministry said in a statement. The ministry also said in a separate statement it will launch an investigation into whether the United States had discriminated against the Chinese chip sector.And on Monday China said an investigation found US chip giant Nvidia had run afoul of the country’s antitrust rules, and vowed an additional probe.The statement did not provide further details about Nvidia’s alleged legal violations or the further probe.Beijing — which announced the investigation in December — is currently engaged in an intense contest with the United States for supremacy in the critical field of semiconductors.Top diplomats and defence chiefs from both nations held back-to-back phone calls last week, which analysts said could mark a step towards a meeting between Trump and Chinese leader Xi Jinping.Trump said in August he expects to visit China this year or shortly afterwards, noting that economic ties between the two countries have improved.

Stock markets were mixed on Monday as traders geared up for an expected interest rate cut by the Federal Reserve this week, while more weak data showed China’s economy continues to struggle.Equities have enjoyed a strong run-up over recent weeks as a string of data on jobs and inflation provided the US central bank with enough leeway to resume its rate reductions.Wednesday’s policy decision follows figures showing the labour market continuing to soften, while prices have not spiked as much as feared in the wake of US President Donald Trump’s tariff war.The keenly awaited meeting is expected to see the Fed lower borrowing costs 25 basis points, although some observers predict it could go to 50 points.Trump said on Sunday “I think you have a big cut. It’s perfect for cutting”.Still, Pepperstone’s Chris Weston wrote: “The market would be surprised if we saw any outcome other than a 25-basis-point cut from the Fed, even if several Fed governors do vote for a 50-basis-point cut.”Attention will quickly turn to the tone of the (policy board) statement, the guidance from Powell’s press conference.”The central banks of Canada, Britain and Japan are due to meet this week.Asia fluctuated after a tepid Friday on Wall Street that saw the Nasdaq inch up to a new peak.Shanghai edged down after data showed further weakness in China’s economy, with growth in retail sales and industrial production much slower than forecast.”Given the slowdown of the past few months, we expect that there’s a strong case for additional short-term stimulus efforts,” said Lynn Song, chief economist for Greater China at ING.And Sheana Yue of Oxford Economics warned “the economy could fall off a cliff in (the fourth quarter) if the sluggish July and August activity pace is sustained, bringing into focus — once again — the urgent need for stimulus”.There were also losses in Singapore, Sydney, Taipei, Manila and Wellington.But Seoul hit another record after South Korean officials scrapped a plan to lower the capital gains tax threshold for stock investors.Hong Kong, Jakarta and Bangkok also advanced, while Tokyo was closed for a break.Paris and Frankfurt were on the front foot while London was flat.In company news Hong Kong-listed Pop Mart, which makes the global smash Labubu dolls tanked more than six percent, wiping billions off its valuation, after JP Morgan downgraded it saying it was overpriced.The firm is up around 180 percent this year but is down more than a fifth from its August record owing to signs demand for the dolls is waning.And in Sydney, ANZ bank, one of Australia’s “big four” lenders, retreated following news it had agreed to pay a record fine of Aus$240 million (US$159.5 million) over “widespread misconduct”.Also in view are talks between China and the United States in Madrid that will cover a range of issues including trade, with an eye on a November deadline for their tariff pause.Chinese Vice Premier He Lifeng and his team will also discuss their dispute over TikTok with the US delegation led by Treasury Secretary Scott Bessent.The negotiations come after China launched two investigations into the US semiconductor sector on Saturday.- Key figures at around 0810 GMT -Hong Kong – Hang Seng Index: UP 0.2 percent at 26,446.56 (close)Shanghai – Composite: DOWN 0.3 percent at 3,860.50 (close)London – FTSE 100: FLAT at 9,282.99 Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.1730 from $1.1731 on FridayPound/dollar: UP at $1.3585 from $1.3560Dollar/yen: DOWN at 147.44 from 147.67 yenEuro/pound: DOWN at 86.39 pence from 86.52 penceWest Texas Intermediate: UP 0.5 percent at $63.00 per barrelBrent North Sea Crude: UP 0.5 percent at $67.29 per barrelNew York – Dow: DOWN 0.6 percent at 45,834.22 points (close)

China and the United States resumed trade talks on Monday in Madrid, seeking to narrow differences on trade and technology that have strained relations between the world’s two largest economies.Talks restarted at Spain’s foreign ministry, a day after delegations led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng opened the latest round of discussions. The meetings are expected to continue through Wednesday.Officials from the two nations were seen entering the headquarters of the ministry on Monday morning, according to an AFP reporter at the scene.The agenda includes two of the thorniest issues in the bilateral relationship: President Donald Trump’s threat of steep tariffs on Chinese imports and Washington’s demand that TikTok be sold to a non-Chinese owner or face a US ban by September 17.Trade tensions escalated sharply earlier this year, with tit-for-tat tariffs reaching triple digits and snarling supply chains. Both governments later agreed to roll back duties to 30 percent on US goods and 10 percent on Chinese exports, but the temporary truce expires in November.Beijing urged Washington last week to resolve disputes “on the basis of mutual respect and equal consultations.”Over the weekend, China launched investigations into the US semiconductor sector, signalling frictions remain high despite the Madrid talks.The meetings could lay groundwork for a possible summit between Trump and Chinese leader Xi Jinping later this year. Until then, negotiators face the challenge of stabilising an uneasy truce while addressing disputes over technology access, tariffs and rare earth exports.

China’s economy showed further signs of weakness last month, with key data Monday revealing factory output and consumption rising at their weakest pace for around a year.Beijing has struggled to fully reignite the world’s number two economy since the end of the Covid-19 pandemic, with the once-booming property sector mired in a debt crisis and exports facing mounting headwinds.The trends have contributed to a slump in consumer confidence, dragging on activity and threatening leaders’ official growth target for this year of around five percent.Industrial production edged up 5.2 percent year-on-year in August, according to data from the National Bureau of Statistics (NBS), the slowest pace since the same month last year.The figure missed the 5.6 percent growth forecast in a Bloomberg survey of economists.”The activity data point to a further loss of momentum last month,” Zichun Huang, China economist at Capital Economics, wrote in a note.”While some of this reflects temporary weather-related disruptions, underlying growth is clearly sliding, raising pressure on policymakers to step in with additional support,” she said.The NBS also said retail sales climbed 3.4 percent last month — the slowest since November and falling short of the 3.8 percent estimated in the Bloomberg survey.The figure is another sign of China’s protracted spending slump, which has also raised fears of a deflationary spiral weighing down growth.- ‘Soft sentiment’ -China’s vast real estate sector once served as a key driver of economic growth, fuelled by decades of rapid urbanisation and improved living standards.But the industry entered its current downturn in 2020 as the debt of several leading firms soared and major projects stalled.In August, new residential property prices fell year-on-year in 65 out of 70 cities surveyed by the NBS, data also showed.”The property market decline is a key driver behind soft consumer sentiment, which continues to dampen retail sales,” wrote Lynn Song, chief economist for Greater China at ING, in a note.”Sentiment remains soft despite a slew of measures over the past year,” he wrote.Chinese policymakers have since last year taken various steps to encourage spending, including a subsidy scheme for consumer goods and cancellations of certain restrictions on homebuying.But activity is still lacklustre, with data last week showing consumer prices falling in August at their fastest rate in half a year.Urban unemployment ticked up to 5.3 percent last month, a slight increase from 5.2 percent in July, according to NBS data.”Forward signals on the labour market haven’t improved as growing external headwinds cloud the outlook,” wrote Sheana Yue of Oxford Economics.”We estimate that the economy could fall off a cliff in Q4 if the sluggish July and August activity pace is sustained, bringing into focus — once again — the urgent need for stimulus,” she wrote.- ‘Numerous risks’ -NBS chief economist Fu Linghui acknowledged “weak” demand in the domestic economy during a Monday news conference, noting that “some enterprises are facing operational difficulties”.He added that “there is still much instability and uncertainty in the external environment, and (China’s) economic performance still faces numerous risks and challenges”.One of the main challenges facing the economy is the strained relationship between Beijing and Washington as disputes over technology and geopolitics mount.China-US trade tensions have been on a rollercoaster ride in 2025, with both sides slapping escalating tariffs on each other.Officials from the two countries on Sunday kicked off a fresh round of talks in Madrid, where they are set to thrash out disputes over hefty US tariffs and other key issues.