CAP: Economy holding up, but growth remains weak

Our China Activity Proxy suggests that growth picked up a touch last month, but the economy is still growing at less than 3.5% y/y. The services sector has been outperforming in recent months thanks to a boost from strong financial sector activity. Meanwhile, industry has been growing at a slower pace than during the first half of the year, although that’s mostly the result of domestic factors rather than the hit from US tariffs.