Overview
- The National Bureau of Statistics reported on July 15 that second-quarter GDP rose 4.3 percent year‑on‑year, the slowest quarterly pace since late 2022 and below market forecasts.
- June exports surged about 27 percent year‑on‑year, led by semiconductors, data‑processing equipment and electric vehicles that benefit from the global AI investment cycle.
- Domestic demand is the main drag, with retail sales only modestly improved in June, H1 fixed‑asset investment down 5.7 percent year‑on‑year and property investment falling about 18 percent.
- Beijing is expected to favour calibrated, targeted fiscal support such as faster local government bond issuance and consumer incentives before the late‑July Politburo meeting while the People’s Bank of China will likely keep policy rates unchanged and reserve requirement ratios largely steady.
- The gap between strong high‑tech exports and weak consumption creates a K‑shaped recovery that strains jobs and household confidence and raises the risk that export strength could prove temporary if global demand or energy shocks worsen.