Stop me if you’ve heard this before: Policymakers in Beijing are still struggling to engineer a durable recovery in consumption.

Nearly a year on from the introduction of what was described at the time as an earnest, whole-of-government stimulus push, there’s scant evidence to suggest the Party’s any closer to reviving a public joie de vivre lost to the pandemic and smothered by Xi Jinping’s ironically-named “common prosperity” initiative.

Case in point: Retail sales growth in August was just 3.4%, the NBS said Monday. That was below consensus and marked a deterioration from the prior month’s annual rate, which already counted as the slowest since December. For context, retail sales growth averaged 8.5% YoY in the two years leading up to the pandemic.

Industrial production expanded 5.2% in August, the same data showed. That too was a miss and counted as the weakest in a year. August marked the third month in a row that IP growth outstripped retail sales and the 19th in 20.

These figures are uninspired, albeit not completely disastrous. And that’s fitting. Because that’s the Chinese economy in 2025: Uninspired, but not a total disaster.

The Party’s managed to keep up appearances vis-à-vis the annual growth target by leaning into the deflator. But that trick’s getting a bit old. Nominal GDP’s undershot real growth for two years running.

Monday’s data rounds out what it’s fair to call a lackluster series of top-tier readouts for the world’s second-largest economy. Late last week, the PBoC said new yuan loans were just CNY589 billion in August, below consensus and a disappointing rebound following the first net contraction on record.

By my math, the YoY growth rate for the outstanding stock of yuan loans slipped below 7% last month. It was nearly double that five years ago.

Suffice to say credit demand remains nonexistent. That’s very troubling because it means the PBoC is powerless to help. The price of money (credit) isn’t the problem. Rate cuts are thus an example of pushing on the proverbial string. You can’t force people to borrow.

Inflation data for August was a mixed bag. On the good news side, factory gate prices contracted by the least since April, but nevertheless spent a 35th month in deflation. Core consumer prices rose 0.9%, the fastest since February of 2024.

The bad news: A big drop in food prices pushed headline CPI back into negative territory. Remember, China’s fighting to resuscitate price growth. They want more inflation, not less of it.

This situation is, pretty much by definition, the result of a domestic overcapacity problem, and it’s starting to spill over into services where cutthroat competition (a race to the bottom) is eroding profits at some of the country’s biggest tech firms. The deflation streak mentioned above (nine quarters as of Q2) is the longest on record.

The only thing keeping the ship afloat (no international commerce pun intended) is exports, but even there, the cracks are showing. Overall shipments abroad grew just 4.4% in August, the least since February.

As the figure shows, shipments to the US plunged 33% last month, and although China made up for some of that by shipping more product to other markets, it wasn’t enough to bolster the headline growth print, which missed estimates badly.

Import growth in August was an insipid 1.3%, indicative of the uphill battle the Party faces to reanimate domestic demand which is “still fragile and in need of support,” SocGen’s Michelle Lam said.

“Overall, the data is in line with our view of a slowdown in the second half of the year, as consumption subsidies run out of steam and the tariff impact on exports becomes more visible,” Lam added.

The perceptive among you may recognize that quote. If you do recognize it, you might be inclined to say, “Hey! That’s from last month!” To which I’d reply: “Yep. And the fact that it’s just as applicable to this month’s top-tier data out of Beijing speaks volumes.”

Oh, well. At least Xi can still put on a good parade. “Follow the Party!”