Global Economy Slows as China and US Struggle to Transition

The global economy is showing signs of weakness as major economies like China and the US struggle to transition from industrial exports to internal demand. In China, bank lending contracted for the third time in history, with net new yuan loans falling by ¥340 billion in July. This slowdown reflects a decline in consumer debt, particularly in housing, and a downturn in traditional business sectors. The tech sector is increasingly turning to bond markets instead of bank loans.

The US economy is also showing signs of exhaustion, with retail sales dipping 0.6% in July after a year-over-year gain of 5.2%. Consumer sentiment has also declined, with year-ahead inflation expectations rising to 4.3%. The Federal Reserve will be watching these trends closely as it considers interest rate decisions.

Meanwhile, other countries are seeing strong economic growth. Taiwan's GDP rose 12.9% in Q2-2026, while Malaysia's economy expanded 6.0% in the same period. India's bank lending is booming, with a record rise of over 19% at the end of July.

The oil price has risen by 6% over the past week due to ongoing tensions between Iran and the US. The bitcoin price is up 0.4% from Saturday but down 2.6% for the week.