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China’s economy faced significant headwinds in the second quarter, growing at a slower-than-expected rate of 4.7%. This downturn, attributed to a prolonged property market slump and weakened consumer spending, has sparked concerns of further stimulus measures from Beijing.
The latest official data, falling short of analysts’ forecasts of 5.1%, marks the slowest growth since early 2023, down from 5.3% in the previous quarter. Following the disappointing report, China’s yuan and stock markets experienced declines.
As Beijing prepares for its crucial third plenum to boost economic confidence, policymakers face a delicate balancing act between stimulating growth and managing debt levels. The government’s ambitious target of 5.0% growth for 2024 may necessitate additional economic support.
Quarterly growth registered at 0.7%, down from a revised 1.5% in the preceding quarter, highlighting challenges in domestic demand exacerbated by the ongoing property crisis. To counter these effects, China has ramped up investments in infrastructure and high-tech manufacturing.
The National Bureau of Statistics cited adverse weather conditions and mounting external uncertainties as contributing factors to the economic slowdown in the second half of the year. Despite resilient export figures, concerns over escalating trade tensions loom large, complicating China’s economic outlook.
Recent data reveals mixed signals with factory output growth exceeding expectations in June but slowing from May, while retail sales growth fell short of projections. This follows earlier reports showing a rise in exports but unexpected declines in imports, indicative of manufacturers frontloading orders amid looming trade tariffs.
