In the first half of 2024, China’s economy faced challenges due to the complex international environment and ongoing adjustments to the domestic economic structure. Despite these challenges, China’s GDP increased by 5.0% year-over-year in H1 2024, meeting the target set at the Two Sessions earlier in the year. This growth was driven by robust exports and central government-led investment in manufacturing and infrastructure.
However, in Q2 2024, the economy saw a 4.7% growth, which was a 0.8% decrease compared to Q1 and fell short of market forecasts. Several factors, including extreme weather conditions, adjustments in the financial sector’s valuation, and weak domestic demand, negatively impacted economic growth. Falling prices affected incomes, corporate profits, and fiscal revenues, putting a damper on spending.
For the second half of 2024, the government will likely adopt a more lenient macro policy to stimulate economic growth recovery.
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