China’s economic growth fell short of expectations after growing by 4.7% in the second quarter compared to a year earlier, the National Bureau of Statistics (NBS) announced. The reading was below the 5.08% growth predicted by economists polled by Chinese financial data provider Wind, and down from the 5.3% growth in the first quarter. In the first half of the year, China’s gross domestic product grew by 5% year-on-year, according to the NBS. The Chinese government has set an annual economic growth target of around 5%, with multiple domestic and international economic institutions predicting that the goal is likely to be achieved. “The current external environment is complicated, while domestic demand remains insufficient. We still need to consolidate the foundation for economic recovery,” the NBS said on July 15. Retail sales in China rose by 2% in June year-on-year, compared with 3.7% in May. China’s industrial output increased by 5.3% last month from a year earlier, compared to the 5.6% growth in May. Overall fixed-asset investment (FAI) rose by 3.9% in the six first months of 2024 year-on-year, compared with a 4% gain in the January-May period, while private investment grew by 0.1% in the first half of the year. Property investment fell by 10.1% year-on-year in June.
China set a new record for foreign trade in goods in the first half of 2024, representing a year-on-year increase of 6.1% to CNY21.17 trillion, according to the General Administration of Customs (GAC). China's foreign trade grew 7.4% in the second quarter, 2.5 percentage points higher than the first quarter and 5.7 percentage points higher than the fourth quarter of last year. In June, the country reported a 5.8% of growth in its foreign trade, continuing to maintain good momentum of stable development, according to the GAC. Exports of China-made electromechanical products have become one of the highlights of the country's foreign trade from January to June, reaching CNY7.14 trillion, an increase of 8.2%, accounting for 58.9% of the total value of exports. Among them, exports of automatic data-processing equipment and its parts and components totaled CNY683.77 billion, an increase of 10.3%. Exports of integrated circuits rose 25.6% to CNY542.74 billion, and exports of automobiles stood at CNY391.76 billion, soaring 22.2% compared with the same period last year. Exports in both the electronic information industry and in automobile and ship manufacturing saw strong increases in the first six months, the Global Times reports.
The South China Morning Post provides the figures in dollar terms. China’s export values grew at the fastest pace in 15 months year-on-year in June, but imports fell due to sluggish domestic demand. China’s exports rose by 8.6% from a year earlier to USD307.85 billion in June, better than the 7.6% increase recorded in May. “After accounting for changes in export prices and for seasonality, we estimate that export volumes edged up, reaching record highs,” said Huang Zichun, China Economist at Capital Economics. Analysts at Nomura said the rise in export growth in June was partly due to a low base, and was broad-based across most of China’s major trading partners. In the first half of 2024, China’s exports also rose by 3.6% year-on-year. China’s imports fell by 2.3% from a year earlier, compared to the 1.8% growth in May, with analysts pointing to softer domestic demand.
It appears that the stronger government bond issuance since May has not yet fed through to increased infrastructure spending and demand for commodities – imports of industrial metals dropped back last month,” said Huang at Capital Economics. “But we expect this to occur soon, boosting the import-intensive construction sector.” The “surprising drop” in import growth pointed to weak domestic demand, said analysts at Nomura. In the first half of the year, China’s imports grew by 2%.
China’s exports to the Association of Southeast Asian Nations (Asean) rose by 15% in June compared to a year earlier. Shipments to the United States, meanwhile, increased by 6.6%, representing a second straight month of positive growth. Exports to Russia grew by 3.4% year-on-year in June, while shipments to the EU rose by 4%. China’s June trade surplus rose to a record high of USD99.05 billion, compared with USD82.6 billion in May. China’s trade surplus in the first half of the year stood at USD434.9 billion. Huang at Capital Economics said he expects exports to remain robust in the near term despite increased Western tariffs. “Tariffs from the U.S. and EU won’t significantly impact overall exports in the short-run. They only target a small portion of Chinese exports, and their effect can be dampened through trade re-routing and exchange rate adjustments,” he said. Exports of motor vehicles remained largely resilient, according to analysts at Nomura, as EU anti-subsidy duties on Chinese electric vehicle imports only took effect in early July. But Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management, cautioned that “trade conflicts are getting worse”.
China’s railway transport broke new records, according to the China State Railway Group. From January to June, there were 2.096 billion passenger trips, up 18.4% year-on-year. Passenger turnover – the number of passengers multiplied by the distance traveled – reached 777.95 billion passenger-kilometers, another record and up 14.1%. The railway network transported a record 332 million metric tons of cargo last month, up 6.1% year-on-year, with freight turnover of 266.5 billion ton-kilometers, up 5.3%. Faster high-speed sleeper trains connecting Beijing and Shanghai with Hong Kong were introduced on June 15, reducing travel time between Beijing and Hong Kong to 12.5 hours from over 24 hours, and between Shanghai and Hong Kong to about 11 hours from over 19.5 hours. Both sleeper trains depart in the evening and arrive at their destinations in the morning. In the first six months of the year, the national railway system operated an average of 10,256 passenger train services a day, 882 more than in the same period last year, representing growth of 9.4%.
This overview is based on reports by the Global Times, the China Daily and the South China Morning Post.
