Official figures reveal China's economic growth rate slowed to 5.2%, raising concerns over future performance amidst ongoing trade disputes.
China's Economic Growth Faces Challenges Amid Trade Struggles
China's Economic Growth Faces Challenges Amid Trade Struggles
China's economy reports slower growth as tariffs and property market crisis impact performance.
China's economy is experiencing a slowdown as trade tensions exacerbated by US tariffs and a lingering property market crisis take their toll. The latest official figures indicate that the world's second-largest economy recorded a 5.2% growth in the three months leading to June, a decline from the 5.4% growth reported in the previous quarter.
Despite this slowing growth, China has managed to avoid a severe downturn, owing to government interventions aimed at supporting the economy and a fragile truce in tariff disputes with the US. Chinese officials highlighted in a statement from the National Bureau of Statistics that the economy “withstood pressure and made steady improvement despite challenges.” The report noted a 6.4% growth in manufacturing, attributed to rising demand for advanced tech products such as 3D printing devices, electric vehicles, and industrial robots, alongside gains in the services sector, which encompasses transport, finance, and technology.
However, the retail sector faced difficulties, with growth slowing to 4.8% in June compared to a 6.4% increase in May. In a troubling sign for the real estate market, new home prices fell in June at the fastest rate seen in eight months, highlighting that despite various governmental measures, the sector continues to struggle.
Several economists are predicting that China may fall short of its annual growth target of approximately 5% for the year. Dan Wang, director for China at consultancy Eurasia Group, noted, “The real question is by how much. We believe it will defend a floor of 4%, which remains the minimum politically acceptable level.”
The ongoing tariff dispute—initiated by former US President Donald Trump—involves significant levies on Chinese imports, reaching 145%. In retaliation, China imposed a 125% duty on select US goods. Recent negotiations in Geneva and London brought about a temporary halt to these tariffs, with both nations aiming for a permanent trade agreement by August 12. Meanwhile, the US has also targeted economies with close ties to China, imposing heavy tariffs that compound the trading situation.
