China’s second-quarter economic growth fell short of market expectations and weak consumption and property data provided fresh warnings to policymakers, who held a key economic meeting in Beijing on Monday to discuss solutions to the country’s woes.
China’s National Bureau of Statistics (NBS) said on Monday that the world’s second-largest economy grew 4.7 percent in the second quarter from a year earlier.
According to the NBS, China’s gross domestic product grew 5% year-on-year in the first half of this year.
China’s economy grew 0.7 percent in the second quarter of this year from the previous quarter, down from 1.6 percent growth in the previous quarter.
“The current external environment is complex and domestic demand remains insufficient. We need to strengthen the foundations for economic recovery,” the National Statistics Office said on Monday.
Meanwhile, China’s industrial production rose 5.3% last month from a year earlier, up from a 5.6% increase in May.
Overall fixed asset investment in the first six months of 2024 increased 3.9% year-on-year, well above the 4% increase in the first five months of the year. Meanwhile, private investment increased by 0.1% in the first half of this year.
Meanwhile, real estate investment fell 10.1% in June compared to the same month last year, unchanged from the rate of decline in May.
China’s overall urban unemployment rate was 5% in June, unchanged from May.
Despite escalating trade tensions and challenges in the domestic real estate and job markets, Beijing has set a target of annual economic growth of about 5 percent, and several domestic and international economic agencies predict the target is likely to be met.
“China’s economy is showing a broad-based slowdown with weaker consumer and business sentiment worsening,” said Gary Ng, senior economist at Natixis Corporate and Investment Bank.
“The property sector is widely expected to remain weak, while a further slowdown in retail sales and fixed asset investment is a concern amid continuing de-inflationary pressures.
“Without a shift to demand-side policies, China may not achieve its 5 percent annual growth target. The good news is that poor economic data may finally provide an excuse for a change of course.”
