China’s GDP Growth Slows to 4.7% in Second Quarter, Below Expectations
China’s National Bureau of Statistics reported on Monday that the country’s GDP grew by 4.7% in the second quarter compared to the previous year. This was below the expected 5.1% increase and marked a slowdown from the 5.3% growth observed in the first quarter.
June’s retail sales saw an increase of 2%, falling short of the expected 3.3% growth. The Bureau noted that adverse weather contributed to the slowdown in second-quarter growth. It also highlighted growing external uncertainties and domestic challenges expected in the latter half of the year.
The economic landscape in China has shown disparities, with industrial output surpassing domestic consumption. This has heightened deflation concerns amid a downturn in the property sector and increasing local government debt. Despite resilient Chinese exports offering some stability, escalating trade tensions now pose a significant risk.
The statistics were released as Beijing aims to bolster economic optimism during the eagerly awaited third plenum, a crucial leadership gathering beginning Monday. However, conflicting goals, such as the need to stimulate growth while reducing debt, present challenges to these efforts.
China has been experiencing a shift from high-speed growth to a more moderate pace in recent years. The GDP growth rate for 2023 was around 5.5%, down from previous double-digit growth rates seen in earlier decades. This shift can be attributed to several interrelated factors, including a transition from an investment-driven growth model to one that emphasizes consumption and services, an ageing population, escalating trade tensions, environmental challenges, and the transition to a more innovation-driven economy.
