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In Q2 2024, China’s GDP grew by 4.7% year-on-year, falling short of the 5.1% market forecast and decelerating from Q1’s 5.3% growth. This marks the slowest annual increase since Q1 2023, attributed to several factors: a persistent property market downturn, weak domestic demand, declining yuan value, and trade tensions with Western countries. 

Despite these challenges, the economy expanded by 5.0% in the first half of 2024, aligning with the government’s annual growth target of around 5.0%. June’s economic indicators largely showed a slowdown, with retail sales growth hitting its lowest point in nearly 18 months and industrial output growth reaching a 3-month low. The urban unemployment rate remained steady at 5.0% for the third consecutive month. 

On the trade front, exports surpassed expectations, while imports unexpectedly decreased. Amid these economic developments, the Chinese Communist Party commenced its Third Plenum, a crucial political event. The gathering is expected to introduce various reform measures and recommend additional support actions to stimulate economic recovery. 

China’s central bank kept its medium-term lending rate at 2.5%, meeting market expectations. The move aims to support yuan stability amid ongoing economic challenges. The offshore yuan weakened beyond 7.27 against the dollar following China’s release of mixed economic indicators. 

(China GDP YoY%，National Bureau of Statistics) 

(USDCNY Weekly Chart) 

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