(CTN NEWS) – China announced on Monday that its second-quarter gross domestic product (GDP) experienced a year-on-year growth of 6.3%, falling short of expectations.
Additionally, the unemployment rate for young individuals between the ages of 16 and 24 reached a new record high of 21.3% in June.
The second quarter saw a 6.3% GDP growth, indicating a slower pace of 0.8% compared to the first quarter, which recorded a 2.2% quarter-on-quarter growth.
Analysts surveyed by Reuters had predicted a 7.3% increase in second-quarter GDP.
Fu Linghui Expresses Confidence in China’s Growth Target Amidst Complex International Environment
Fu Linghui, spokesperson for the National Bureau of Statistics, acknowledged that China faces a complex international environment, both geopolitically and economically.
However, he expressed confidence that China can still achieve its full-year growth target. In March, Beijing had set a goal of around 5% growth for 2023.
Retail sales in June experienced a 3.1% increase, slightly below the anticipated 3.2%. Notably, sales of catering, sports and entertainment products, as well as alcohol and tobacco, showed the most significant growth.
On the other hand, sales of automobiles, office products, and daily use goods declined compared to the previous year.
According to CNBC calculations based on official data accessed through Wind Information, online sales of physical goods grew by 6.7% in June, displaying a slower pace than in May.
China’s Industrial Production and Fixed Asset Investment Show Positive Growth
In June, industrial production exhibited a 4.4% year-on-year increase, surpassing the earlier projection of 2.7%.
Fixed asset investment during the first half of the year recorded a 3.8% rise, outperforming the predicted 3.5%.
Within the realm of fixed asset investment, real estate investment experienced a more significant decline in June compared to May.
Manufacturing investment sustained a steady growth rate, while infrastructure investment witnessed a slowdown.
The urban unemployment rate for June stood at 5.2%.
Regarding the outlook for the second half, spokesperson Fu stated that real estate investment is expected to remain low in the near future.
Furthermore, he anticipated a potential further rise in youth unemployment until August, followed by a subsequent decline.
China’s Economic Rebound Slows as Real Estate Struggles and Exports Decline
After lifting its Covid-19 restrictions in December, China experienced an initial economic rebound that has since lost momentum.
The country’s extensive real estate sector has struggled to recover, while declining global demand has led to a significant drop in exports.
Within China, weak consumer demand has resulted in unchanged prices in June. The People’s Bank of China recently stated that it anticipates a decrease in July, but expects inflation to pick up later in the year.
One positive aspect of the recovery has been domestic travel. Urban residents saw their tourism spending more than double in the first half of the year compared to the previous year, reaching 1.98 trillion yuan ($280 billion), according to the Ministry of Culture and Tourism.
However, rural residents’ travel spending only rose by approximately 40% during the same period.
Official data revealed that the combined total of 2.3 trillion yuan for the first half of the year was lower than the reported 2.78 trillion yuan during the same period in 2019, before the onset of the pandemic.
In response to the economic challenges, Beijing recently announced the extension of property support measures and introduced comprehensive measures to bolster exports.
The government has also extended tax incentives for electric car purchases, recognizing the importance of supporting this growing industry.
However, Beijing has displayed caution when it comes to implementing larger-scale stimulus measures, primarily due to the significant increase in local government debt.
More details on economic policy may emerge from an upcoming Politburo meeting scheduled for later this month.
RELATED CTN NEWS: