On July 12, 2024, cars made in China are waiting to be shipped for export at Yantai Port, Shandong Province, China.
VCG | Visual China Group | Getty Images
BEIJING – China's second-quarter economy GDP increased by 4.7% annually According to a Reuters survey, economic growth was below expectations of 5.1%.
Retail sales in June also fell short of expectations, growing 2% versus expectations for 3.3% growth.
“We estimate that the sequential decline in discretionary retail spending is the largest since the Shanghai lockdown in April 2022,” Louise Loo, chief economist at Oxford Economics, said in a report.
The company now expects China's GDP growth in 2024 to be 4.8%, up from the 4.4% forecast in December 2023.
However, industrial production rose 5.3% year-on-year in June, beating expectations and Reuters' forecast of 5%. The added value of high-tech manufacturing increased by 8.8% in June.
From January to June, the town's fixed asset investment grew by 3.9%, in line with expectations. Compared with May, investment in infrastructure and manufacturing decreased year-on-year in June, and real estate investment also fell by 10.1%.
Oxford Economics said in late May that housing-related wealth in China will grow 2.2% in 2023, well below the 13% average annual growth rate from 2016 to 2021.
“We must work harder to stimulate market vitality and stimulate endogenous power,” the bureau said in an English press release.
The meeting also called for “consolidating and enhancing the momentum of economic recovery and ensuring sustained and healthy economic development.”
The bureau said the urban unemployment rate in June was unchanged from the previous month at 5%. The unemployment rate for those aged 16 to 24 who are not in school is usually released a few days after the headline data. The latest data shows that youth unemployment remained high at 14.2% in May.
Data show that in the first half of this year, the per capita disposable income of urban residents was 27,561 yuan ($3,801), an increase of 4.6% compared with the same period last year.
The disposable income of rural residents grew faster, with a nominal growth of 6.8%, but it was 11,272 yuan, which was not half that of urban residents.
No press conference
The National Bureau of Statistics did not hold a press conference on the release of the data. In addition, China's high-level policy meeting, the Third Plenary Session of the Central Committee of the Communist Party of China, will open on Monday.
Peng Xiaolong, chief economist of Jones Lang LaSalle and head of research for Greater China, said he is looking forward to how the plenary session will boost confidence and stabilize expectations.
He said that China still needs to do more work to achieve its growth target of about 5%, because the economy only grew by 5% in the first half of the year, and growth may slow down in the second half of the year.
China's gross domestic product increased by 5.3% year-on-year in the first quarter.
Wind information data shows that GDP grew by 3.97% in the first quarter and 4.01% in the first half of the year.
Xu Hongcai, deputy director of the Economic Policy Committee of the China Policy Science Association, said China's exports have performed better than expected as a growth driver, but there are uncertainties in the future due to trade tensions.
China is likely to step up fiscal support and loosen monetary policy in the second half of the year, he said.
China's exports increased by 8.6% annually, exceeding expectations Customs data released on Friday show. However, imports fell by 2.3% year-on-year in June, falling short of small growth expectations.
Cosmetics sales plummet
Total retail sales of consumer goods increased by 3.7% in the first six months of this year, of which online retail sales of physical goods increased by 8.8%. Service industry sales increased by 7.5%.
Sales of communication equipment, sports and other entertainment products, and tobacco and alcohol increased by more than 10%. Sales of grain, oil and food products increased by 9.6%.
In June, sales of sports categories fell 1.5% compared with the same period last year, while sales of alcohol, tobacco and communication equipment increased.
Cosmetics sales in June plummeted 14.6% compared with the same period last year, becoming the worst-performing category.
Catering sales increased 5.4% year-on-year in June and 7.9% in the first half of the year.
Other measures also point to weak domestic demand.
China's consumer prices rose 0.2% in June compared with the same period last year, which was lower than expected. Core CPI, which excludes volatile food and energy prices, rose 0.6% in June from a year earlier, slightly lower than the 0.7% increase in the first six months of this year.
Credit demand is weak
China's credit data released on Friday showed that the growth rate of broad money supply and new RMB loans in the first half of the year fell sharply compared with the same period in 2023.
Home loans grew by 1.46 trillion yuan ($200 billion) in the first six months of this year, nearly half of the 2.8 trillion yuan in new loans in the category last year. According to the People's Bank of China.
Corporate loans increased by 11 trillion yuan in the first half of the year, slightly lower than the 12.81 trillion yuan in the same period last year.
“June monetary and credit data suggest that credit demand remains weak,” Goldman Sachs analysts said in a note on Friday. “Recent policy communications indicate that the central bank continues to focus on strengthening monetary policy transmission and downplaying the importance of total credit growth. Looking ahead, the growth rate of new RMB loans and M2 may further gradually slow down.”