China’s economy grew by 4.7% annually in the second quarter, which was lower than expected and slower than the previous three months. Experts had predicted a 5.1% growth. The slower expansion was due to weak consumer demand and a prolonged property slowdown. Policymakers have been more involved in recent months to boost confidence.

During the Chinese Communist Party’s Central Committee meeting, the country’s leadership is expected to set the direction of economic policy. The government aims to focus on “high-quality development” in electric vehicles and artificial intelligence to upgrade the manufacturing sector.

In June, industrial production exceeded expectations by 5.3%, but retail sales only rose by 2%, falling well below predictions. Fixed-asset investment increased by 3.9% in the first half of 2024. However, this official data suggests stronger growth in production than on demand.

China’s exports rose 8.6% in dollar terms in June, while imports declined 2.3%, indicating weak demand. Additionally, consumer prices only increased by 0.2% year over year in June, and new home prices experienced a significant 4.5% yearly drop, the fastest decline in nine years. New construction and property investment also decreased in the 2024 year’s first half

China’s government has set a full-year economic growth target of about 5%, following a 5.2% growth in 2023. Observers closely monitor the third plenum for possible additional stimulus, particularly for the struggling housing sector. The recent economic data has led several banks to lower their full-year forecasts for China’s economic growth.

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