China’s mired in an intractable economic malaise.

You’ve heard that how often from me? This story hasn’t changed in a very long time which imparts an air of recitation to each successive update, but that’s ok. Because the repetitive nature of the narrative serves to underscore the most important point: The situation’s not improving. In fact, it’s getting worse on some metrics and barely better on all the others.

Beijing released activity data covering July on Thursday and if there were bright spots, I didn’t see them. Local equities looked pleased with a marginal pickup in YoY retail sales growth, but at 2.7%, the pace still counted as lackluster in the Chinese context.

Market participants are understandably hyper-focused on the spending impulse given that moribund domestic demand is the proximate cause of what’s ailing Xi Jinping’s economy. But it’d be a mistake to celebrate the fillip in the July figures. It was small, seasonal and, more importantly, set against a deceleration in industrial output and an apparent downshift in fixed investment, which grew just 3.6% over the first seven months of the year.

Beijing’s shown little interest in deploying some form of helicopter money in the service of engineering a consumer revival, preferring instead to lean on the country’s factories to prop up growth. That strategy’s controversial in the West, where politicians fear the resultant overcapacity will be foisted on the rest of the world as a tsunami of cheap Chinese exports.

Geopolitically unpopular and desperate though it is, that strategy’s at least managed to keep the world’s second-largest economy afloat and on track to meet the Party’s 5% real growth target. But if industrial output downshifts too much without a material increase in domestic demand, the growth goal could become unachievable, the best efforts of Xi’s beholden statisticians (who’ve resorted to manipulating the deflator to flatter the figures) notwithstanding.

Note that infrastructure investment decelerated further last month, according to Thursday’s data. The figure above paints a worrying picture: It’s another domestic demand canary.

Speaking of canaries, harbingers and bad omens, Thursday’s numbers came on the heels of a wildly disappointing read on credit creation. Beijing said this week that bank lending — new yuan loans — summed to just CNY260 billion last month, around half of the 460 billion economists expected and the slowest in 15 years.

As the chart shows, there’s simply no demand out there for credit — regardless of price.

Recall that the PBoC has cut rates. Last month, the bank trimmed both the short-term policy rate that’s set to become the go-to signaling mechanism for markets and the rate which used to play that role. Banks dutifully lowered the rate on loans to their best customers at both the one- and five-year tenors.

Those cuts are tantamount to pushing on the proverbial string. I’ve said that again and again (and again some more). The abysmal July credit creation data underscores the point: The price of money isn’t the problem. Supply isn’t the problem. The problem’s demand. Specifically: There isn’t any. Xi’s policies have collapsed consumer sentiment, pushing China to the brink of deflation.

The property crisis at the heart of it all improved at the margins last month, according to Thursday’s deluge of data, but “improved” is a highly relative term. The MoM pace of new home price declines stabilized, but as the figure below shows, the YoY drop accelerated.

Can you feel the savings?! Small wonder new construction remains in an egregious tailspin.

Although headline CPI picked up in July, core price growth in China, at 0.4%, missed estimates and was the slowest since January. Producer prices spent a 22nd month in deflation.

Note also that when you strip out loans to financial institutions, CNY lending actually contracted last month — that is, households and businesses paid back more than they borrowed.

As the (alarming) figure shows, that’s only happened one other time in two decades, which is to say it’s basically never happened.

This is a spiral. It’s self-fulfilling. If the Party doesn’t pull China out of this, and the country succumbs to deflation, the PBoC will end up on a treadmill: They’ll have to ease just to stand still as deflation puts a floor under real rates. If they cut too fast in an effort to outrun that dynamic, they risk capital flight. If they don’t cut, real borrowing costs will be onerous, further depressing credit creation and undermining already nonexistent domestic demand.

This, apparently, is “common prosperity.” Mao would be proud. Taken with gale-force geopolitical headwinds — which won’t abate regardless of who wins The White House in November, China antagonism being one of the only bipartisan issues in D.C. these days — the inescapable conclusion is that China’s screwed. And on any number of levels.

What can you say? Couldn’t have happened to a nicer guy, Xi.