In the second quarter, Chinese growth slowed sharply to 4.7% compared to 5.3% in the previous quarter and 5.1% expected.
Signs of sluggishness in the domestic market are increasing. Retail sales are the weakest since the beginning of 2023. Credit granting decreased sharply in June compared to June 2023, and inflationary pressures remain largely absent. Also, for June, inflation increased by only 0.2% over one year and even fell by 0.2% compared to the previous month.
While the domestic market is weakened, foreign trade drives growth. In June alone, China's trade surplus approached USD 100 billion (USD 99.1 billion).
Fewer imports helped to reach a record trade surplus
This record surplus in a month is partly explained by the sluggishness of imports, down 2.3% year-on-year. However, despite the customs duties imposed here and there on Made in China, exports continue to grow steadily, evolving by 8.6% over one year.
The industry is benefiting from this strong export performance. Compared to the first half of 2023, its production increased by 6% over the first six months of the year.
This sharp slowdown in growth is putting pressure on Beijing, which will have to continue to announce measures to revive the economy. However, on the export front, the country is benefiting from the slow recovery in the West. Since the competitiveness of Chinese products is undeniable, exports remain one of the main drivers of growth.
We continue to invest in China across all of our portfolios.
GROWTH IN CHINA (Annual change, in %)
With slowing growth, Beijing must announce new measures to support the economy. But the country's competitiveness is undeniable.