Retail sales growth is the weakest since the country emerged from Covid-19 lockdowns
\n Beijing
\nPressure on Beijing to take steps to improve Chinese consumer confidence has intensified after news that weak retail spending dragged down the growth rate of the world\u2019s second biggest economy.
\nWith falling house prices still acting as a drag on activity, official figures showed the Chinese economy expanding at an annual rate of 4.7% in the second quarter \u2013 much weaker than the 5.1% expected by the financial markets.
\nAnnual retail sales growth slowed from 3.2% to 2% in the three months ending in June \u2013 the weakest in 18 months \u2013 and fell slightly in June alone.
\nLynn Song, the chief China economist at ING bank, said retail sales growth was the lowest since the country emerged from Covid-19 lockdowns and showed the depressed state of consumer confidence remained a big headwind to the economic recovery.
\n\u201cA negative wealth effect from falling property and stock prices, as well as low wage growth amid various industries\u2019 cost cutting is dragging consumption and causing a pivot from big-ticket purchases toward a basic \u2018eat, drink and play\u2019 theme,\u201d Song said.
\nThe government in Beijing has set a growth target for 2024 of 5% \u2013 something analysts consider to be a stretch in the absence of tax cuts, spending increases and measures to help the property market.
\nOn a quarterly basis, the economy expanded by 0.7% in the three months to June, compared with a downwardly revised 1.5% in the first quarter, the National Bureau of Statistics said.
\nTo counter soft domestic demand and its property crisis, China has increased infrastructure investment and ploughed funds into hi-tech manufacturing.
\nStrong export growth has partly compensated for the reluctance of consumers to spend. Figures released last week showed China\u2019s exports in June were up 8.6% from a year earlier, while imports shrank by 2.3%.
\nDuncan Wrigley, the chief China+ economist at Pantheon Macro, said: \u201cThe property market is showing tentative signs of bottoming out. New home prices sank 0.67% month on month in June, a trivial improvement from the 0.71% drop in May. Preowned home prices dropped 0.85%, after the 1.00% dive in May. Residential sales value fell 12.2% year on year in June, partly thanks to base effects, after crashing 26.4% in May.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Retail sales growth is the weakest since the country emerged from Covid-19 lockdowns Beijing Pressure on Beijing to take steps to improve Chinese consumer confidence has intensified after news that weak retail spending dragged down the growth rate of the world\u2019s second biggest economy. With falling house prices still acting as a drag on activity, […]<\/p>\n","protected":false},"author":2,"featured_media":418727,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-418714","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n