China's economy is facing challenges as credit data for July shows a slump in demand for borrowing and the real estate sector continues to struggle. New local currency bank loans plunged by 89% in July compared to June, and developer Country Garden is on the brink of default. Consumer sentiment is weak, and there are fears that China may miss its growth target of around 5% this year. The real estate sector, which holds the majority of household wealth, is causing concern as it could drag down the broader economy. State-owned companies have fared better than non-state-owned developers.

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