China’s economy grew at a slower pace than economists had anticipated in the second quarter of 2024. The world’s second-largest economy continues to grapple with trade tensions with the US and Europe.
The United States and the European Union are trying to restrict China’s access to critical technologies to protect their markets from cheap, subsidized Chinese goods. These countries have imposed high import tariffs on China, which is slowing the country’s economic growth.
Additionally, Chinese consumers are spending less. Retail sales in China increased by only 2 percent last month, marking the smallest growth since December 2022. In May, sales had risen by 3.7 percent. The Chinese government previously implemented measures to boost consumer confidence, but these have had little impact so far. “Domestic demand remains insufficient,” stated the Chinese National Bureau of Statistics (NBS).
The debt crisis in the real estate market is also hindering China’s economy. Home sales have been declining for three years, leaving large numbers of properties vacant in many cities. The Chinese population cannot afford them.
The government has taken several measures to address this issue. Earlier this year, they announced plans to buy homes and sell them at lower prices. However, this plan has yet to yield significant results.
Economists had predicted a growth rate of 5.1 percent, but the Chinese economy grew by only 4.7 percent in the second quarter, according to the NBS. This is the lowest growth rate since early 2023. In the first quarter, the economy had grown by 5.3 percent.