China's economic data in key areas in July saw normal monthly fluctuations, the National Bureau of Statistics (NBS) said on Tuesday.
NBS spokesperson Fu Linghui said that China's economy has continued on its recovery trend, but still faces challenges and pressure from the complicated international environment and a lacking domestic demand.
Figures released by the NBS showed the retail sales of consumer goods increased by 2.5 percent year on year last month to nearly 3.68 trillion yuan ($512.22 billion).
Service sales rose by 20.3 percent year-on-year in the first seven months of 2023.
"Consumption of services, such as summer holiday tourism, picked up markedly, providing important support for consumption expansion," said Fu.
Data shows that the pace of recovery in service is much faster than that of the overall retail sector, Bruce Pang, chief economist and head of research at JLL Greater China told CGTN .
China's value-added industrial output, an important economic indicator, went up 3.7 percent year on year in July. The output of the raw material sector climbed 8.8 percent from a year ago in July, 2 percentage points higher than the growth rate a month earlier.
Total fixed-asset investment in the first seven months of 2023 stood at 28.59 trillion yuan, increasing 3.4 percent from the same period last year. Investment in high-tech industries grew by 11.5 percent year on year.
The unemployment rate in urban areas stood at 5.3 percent, 0.1 percentage point higher than the month previous.
Pang said that July's data shows China's economy sails against the wind laden with challenges, adding calls for greater policy development. Furthermore, he sees anchoring expectations and boosting domestic demand as priorities.
Macro-policy regulation has been intensified, and the economy is expected to continue its recovery, Fu added.
China's central bank cut the interest rate of its medium-term lending facility (MLF) loans by 15 basis points on Tuesday.
The MLF tool helps commercial and policy banks to maintain liquidity by allowing them to borrow from the central bank using securities as collateral.
China's central bank also lowered the interest rate of its standing lending facility (SLF) by 10 basis points, to meet the liquidity needs of financial institutions.
Robin Xing, chief China economist of Morgan Stanley, told CGTN that more rate cuts are expected in the next month, to facilitate a smooth liquidity situation for the recovery.