China\u2019s economic growth likely slowed in the second quarter of the year, according to an AFP survey, though strong exports linked to a global AI boom helped offset trade disruptions and high energy prices caused by the Middle East war.<\/p>\n
The world\u2019s second-largest economy is increasingly reliant on foreign trade to expand as a prolonged property-sector slump and weak consumer demand continue to pose problems.<\/p>\n
The US-Israeli war on Iran threatened growth as it choked off shipping through the Strait of Hormuz \u2014 through which a fifth of global oil and natural gas normally passes \u2014 and sparked fears of a downturn that would have hit demand for Chinese exports.<\/p>\n
But data Wednesday is expected to show the country\u2019s economy expanded 4.5 percent year-on-year in April-July, according to the median forecast of an AFP survey of experts.<\/p>\n
That would represent a significant slowdown from the five percent recorded in the previous quarter but still leave the economy on track to reach the government\u2019s annual target of 4.5-5.0 percent.<\/p>\n
Dan Wang, a director on Eurasia Group\u2019s China team and one of 11 analysts surveyed by AFP, said the economy had stood up well to energy and supply chain disruptions from the Iran war.<\/p>\n
But he added that \u201cweaker global demand has a visible negative impact on lower-end consumer goods and small exporters\u201d.<\/p>\n
High-tech sectors thrived, however, with industries related to artificial intelligence and renewable energy seeing \u201cstellar performance\u201d, Wang said.<\/p>\n
AI boom <\/p>\n
China weathered a punishing trade war launched by US President Donald Trump last year to emerge with an eye-watering $1.2 trillion trade surplus in 2025, the largest on record.<\/p>\n
Exports have surged again in the first half of this year, driven by demand for AI-related tech and automobiles, with overseas shipments up 19.4 percent on-year in May.<\/p>\n
In the second quarter, \u201cexternal demand continued to outperform despite tariffs and geopolitical uncertainty\u201d, Sheana Yue, senior economist at Oxford Economics, told AFP.<\/p>\n
She said this reflected \u201cChina\u2019s improving competitiveness, continued gains in global market share, and its ability to rapidly scale production in higher value-added manufacturing sectors\u201d.<\/p>\n
But surging exports are compensating for weak domestic demand and subdued business and household sentiment that \u201cappears to have been further weighed down by uncertainty stemming from the Iran conflict\u201d, Yue said.<\/p>\n
Despite the government rolling out billions of yuan in special bonds since 2024 to support trade-in programmes for consumer goods and subsidies, retail sales fell for the first time in three years in May, while fixed-asset investment has also slumped, according to official data.<\/p>\n
The debt crisis in China\u2019s massive property sector, which began in 2020 and has spooked consumers, has also dragged on.<\/p>\n
Once a key store of wealth, home prices across the country have stagnated, dissuading would-be buyers from investing.<\/p>\n
\u201cWith still no signals that the real estate crisis is coming to an end, it is hard to see a recovery in consumption,\u201d said Rabobank\u2019s Teeuwe Mevissen.<\/p>\n
Trade frictions <\/p>\n
Analysts expect new measures will be needed to support growth in the second half of the year, especially if the AI export wave subsides.<\/p>\n
Policymakers had focused on debt resolution and reform in the second quarter, but would likely pivot to \u201cre-prioritise growth, with potential policies to step up investment and support services and employment\u201d, according to Guo Shan at Hutong Research.<\/p>\n
Continued trade frictions with the United States and the European Union \u2014 China\u2019s second-largest trading partner \u2014 could threaten Beijing\u2019s exports and require new efforts to rebalance the economy.<\/p>\n
A US trade truce, agreed last year, is due to expire in November, while the EU is considering measures to protect domestic industries from what it considers unfair competition from China.<\/p>\n
With domestic demand subdued, Chinese manufacturers such as electric vehicle makers have pinned their hopes on overseas expansion to boost profits outside the country\u2019s ultra-competitive market.<\/p>\n
\u201cUltimately, China\u2019s ability to sustain growth will depend on a meaningful recovery in household consumption and a revival in private-sector confidence,\u201d Sarah Tan of Moody\u2019s Analytics said.<\/p>\n","protected":false},"excerpt":{"rendered":"China\u2019s economic growth likely slowed in the second quarter of the year, according to an AFP survey, though…\n","protected":false},"author":2,"featured_media":543697,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,114,113,61,60,35904,116117],"class_list":["post-543696","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-china","tag-economy","tag-ie","tag-ireland","tag-macau","tag-mna"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/543696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=543696"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/543696\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/543697"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=543696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=543696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=543696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}