Pressure has mounted on Beijing for action aimed at bolstering Chinese consumer confidence amid reports of a decline in retail spending contributing to slower economic growth.
Continued decreases in property values are noted as one factor hindering overall activity, with official data indicating the economy grew by 4.7% annually over the second quarter – falling short of analysts' forecasts of a 5.1% expansion.
Omitting retail sales growth from previous rates and hitting its lowest point in 18 months, the figures for June alone also showed a decline.
Lynn Song, ING bank’s China economist, pointed out that weak consumer confidence persists as a significant obstacle to economic rebound efforts. She attributed the slowdown to factors including reduced property and stock value impacting wealth perception and wage stagnation amid industry cost reductions.
The Chinese government's 2024 growth goal of 5% is met with skepticism by analysts without anticipated fiscal interventions or measures targeting the real estate sector. Nonetheless, the National Bureau of Statistics reported a quarterly economic expansion of 0.7%, slightly up from a previously revised first-quarter growth rate.
China has responded to reduced domestic demand and ongoing property challenges by increasing infrastructure spending and investing in high-tech manufacturing industries. Despite this, export performance remains robust with June data showing an 8.6% increase from the previous year, although imports experienced a 2.3% reduction.
Duncan Wrigley of Pantheon Macro observed early indications that the property market might be reaching its lowest point after only slight decreases in new and pre-owned home prices were noted for June compared to May. Residential sales value also saw a decrease, partially offset by previous declines.
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