China’s economic growth misses the mark amid weak demand, risks ‘undershooting’ annual target

China’s economic growth fell short of expectations in the second quarter, with analysts suggesting fiscal easing may ‘feature more prominently’

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China posts 4.7% second-quarter growth, lower than expected

Mia Nulimaimaiti

Published: 10:05am, 15 Jul 2024Updated: 9:16pm, 17 Jul 2024

China’s second-quarter economic growth fell short of expectations, hindered by weak consumption and declining property investment, adding to challenges for Beijing to hit its annual growth target as its top policymakers began a meeting on Monday to discuss solutions to stubborn challenges.

Analysts said the quarterly and monthly data released on Monday served as the latest wake-up call for policymakers, who kicked off the long-awaited third plenum in Beijing.

The world’s second-largest economy grew by 4.7 per cent in the second quarter compared to a year earlier, but this was lower than the 5.08 per cent growth predicted by Chinese financial data provider Wind and the 5.3 per cent growth seen in the first quarter.

“China’s economy shows a broad deceleration as weak consumer and business sentiment further deepen the woes,” said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

In the first half of the year, China’s gross domestic product grew by 5 per cent year on year, while quarter-on-quarter growth slowed to 0.7 per cent in the second three months of the year, down from a rise of 1.5 per cent from the previous three months.

[The latest] data shows that it will be challenging for Beijing to reach its full-year growth target

Ding Shuang, Standard Chartered

Beijing has set an annual economic growth target of around 5 per cent, with its strong export performance serving as a robust driver to offset persistent domestic challenges, with multiple domestic and international economic institutions having predicted that the goal was likely to be achieved following the release of first quarter GDP data in April.

“[The latest] data shows that it will be challenging for Beijing to reach its full-year growth target, and it will have to ensure that GDP growth stays around at least 1.4 per cent quarter on quarter in the next two quarters,” said Ding Shuang, chief economist for Greater China at Standard Chartered.