Chinese authorities have been struggling to shift the economy away from exports toward growth driven by domestic demand.
The Chinese regime said on July 15 that its economic growth slowed slightly in the second quarter, highlighting concerns over weak domestic demand and trade tensions with the United States.
China’s economy in the April to June quarter expanded by 5.2 percent from the same period last year, Beijing’s National Statistics Bureau reported. It’s slightly above the 5.1 percent that economists polled by Reuters had projected, but slower than during the first three months, when gross domestic product (GDP) rose by 5.4 percent year over year.
“Official GDP data came in a touch weaker in Q2. But the figures still overstate the strength of growth,” analysts at Capital Economics said in a note on July 15.
“With exports set to slow and the tailwind from fiscal support on course to fade, growth is likely to soften further during the second half of this year.”
China set this year’s economic growth target at around 5 percent, a goal that many analysts viewed as ambitious due to entrenched deflation and weak domestic demand.
At the press conference releasing the economic figures on July 15, NBS Deputy Director Sheng Laiyun said that economic growth was stable in the first half of the year, but acknowledged headwinds affecting the economy.
“The external environment remains complex and changeable,” Sheng told reporters in Beijing. “The internal structural problems have not been fundamentally resolved, and the foundation of economic operation still needs to be strengthened.”
According to Sheng, 31.2 percent of China’s economic growth in the first half of the year came from exports, a figure that was more than double the 13.9 percent the bureau reported a year ago.
The Chinese authorities have been struggling to shift the economy away from exports toward growth driven by domestic demand.
Separate June activities data, also released on July 15, indicated that consumers around the country are still tightening their belts.
Retail sales, a gauge of consumer spending, grew by 4.8 percent in June from a year earlier, slowing from a 6.4 percent increase in May and missing the 5.4 percent growth anticipated by analysts.
By Dorothy Li
