- Xi tackles slow growth as economy falls short of expectations
- The economy faces challenges like a prolonged property crisis, local government debt, weak consumption, and high unemployment
- State-controlled media have hinted at comprehensive reforms, invoking past major policy shifts
- Analysts doubt Beijing will introduce short-term stimulus plans, focusing instead on bolstering supply chains and high-tech industries like renewable energy and AI
- But trade barriers from major partners like the EU and the US pose further challenges
Xi tackles slow growth as economy falls short of expectations
China’s economy slowed down in the second quarter, growing by 4.7% and falling short of expectations after a strong start to 2024. This comes as China’s leaders gather for the Third Plenum to address the country’s sluggish growth, aiming to meet an annual growth target of around 5%.
The economy faces challenges like a prolonged property crisis, local government debt, weak consumption, and high unemployment. Analysts are watching the Plenum for significant reforms, though they are sceptical about immediate impacts. State-controlled media have hinted at comprehensive reforms, invoking past major policy shifts.
Recent data shows a sharp drop in new home prices, adding to concerns about the property sector. Economists fear this crisis could affect other parts of the economy, particularly smaller regional banks heavily exposed to the housing market and local government debt. Additionally, weak demand is reflected in falling producer prices and slow consumer price growth.
Analysts doubt Beijing will introduce short-term stimulus plans, focusing instead on bolstering supply chains and high-tech industries like renewable energy and AI. However, trade barriers from major partners like the EU and the US pose further challenges to China’s economic revival efforts.
High tech at the top of China economy plans
#China has put developing new quality productive forces, featuring high-tech, high efficiency and high quality, on top of its agenda. Here's how it has been reshaping the country's economic landscape. pic.twitter.com/D5AsPCM9Tt
— China Economy (@CE_ChinaEconomy) July 15, 2024
