China yesterday posted lower than expected growth in the second quarter, with all eyes on how top officials gathering for a key meeting in Beijing might seek to tackle the nation’s deepening economic malaise.
The world’s second-largest economy is grappling with a real estate debt crisis, weakening consumption and an aging population.
Trade tensions with the US and the EU, which have sought to limit Beijing’s access to sensitive technology as well as raising tariffs to protect their markets from cheap, subsidized Chinese goods, are also dragging growth down.
Photo: AFP
Official statistics yesterday showed that the economy grew by only 4.7 percent in the second quarter of this year. That represents the slowest rate of expansion since early last year, when China was emerging from a crippling “zero COVID-19” policy that strangled growth.
Analysts polled by Bloomberg had expected 5.1 percent.
Retail sales — a key gauge of consumption — rose just 2 percent last month, down from 3.7 percent growth in May.
“The external environment is intertwined and complex,” China’s National Bureau of Statistics said.
“Domestic effective demand remains insufficient, and the foundation for sound economic recovery and growth still needs to be strengthened,” it said.
The figures came the same day that the Chinese Communist Party began a key meeting led by Chinese President Xi Jinping (習近平) focused on the economy, known as the Third Plenum.
Xi delivered a “work report” at the opening of the meeting, Xinhua news agency reported.
He also “expounded on a draft decision of the [Chinese Communist Party] Central Committee on further comprehensively deepening reform and advancing Chinese modernization,” it added.
Beijing has offered few hints about what might be on the table.
Xi has said the party is planning “major” reforms.
Analysts are hoping those pledges would result in badly needed support for the economy.
“The four-day meeting of the country’s top governing body couldn’t come soon enough,” Moody’s Analytics economist Harry Murphy Cruise said in a note.
“While the case for reform is high, it’s unlikely to be a particularly exciting affair,” he said. “Instead, we expect a modest policy tweak that expands high-tech manufacturing and delivers a sprinkling of support to housing and households.”
The People’s Daily appeared to confirm lower expectations when it said last week that “reform is not about changing direction and transformation is not about changing color.”
The Third Plenum has previously been an occasion for the party’s top leadership to unveil major economic policy shifts. In 1978, then-Chinese leader Deng Xiaoping (鄧小平) used the meeting to announce market reforms that would put China on the path to dazzling economic growth by opening it to the world. Following the closed-door meeting in 2013, the leadership pledged to give the free market a “decisive” role in resource allocation, as well as other sweeping changes to economic and social policy.
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