China growth slows in second quarter
Exports jump as domestic demand lags, firms absorb higher oil and input costs while car shipments hit new milestone
Images
bbc.com
VCG via Getty Images An employee at a wind turbiner manufacturing company uses work tools to put together some steel parts. In the image, he is pictured squatting at the centre of one of the steel frames.
bbc.com
China growth slows in second quarter as exports surge, domestic demand and property remain weak, higher oil costs force firms to absorb prices
China’s economy grew by 4.3% in the second quarter of 2024, slowing from 5% in the first quarter, according to BBC reporting on official figures. The data covers the first full quarter since the Iran war began in late February and comes as Beijing tries to balance export momentum against a sluggish home economy.
Exports jumped by 27% in June compared with a year earlier, the BBC reports, helped by strong global demand for semiconductors used in AI data centres and by rising overseas sales of Chinese electric vehicles. Monthly car exports topped one million for the first time in June, a milestone that highlights how much of China’s manufacturing machine is now pointed outward.
At home, the picture is thinner. Official commentary from China’s National Bureau of Statistics cited “more external instability and uncertainty” and described an imbalance between strong supply and weak domestic demand. Separate June indicators showed only modest improvement: retail sales rose by 1% after a fall in May, while new home prices slipped again, even if the decline was smaller than the month before.
The squeeze is most visible in pricing power. IG analyst Fabien Yip told the BBC that Chinese businesses are absorbing higher energy and raw material costs because consumers are not in a position to accept higher prices. That is a workable strategy when input costs are stable; it becomes more punishing when oil prices rise and the increase persists, turning a geopolitical shock into a margin problem across supply chains.
Some economists argue the headline slowdown may be partly by design. Capital Economics’ Julian Evans-Pritchard said the weaker figure may reflect Beijing’s decision earlier this year to cut its annual growth target to a range of 4.5% to 5%, the lowest since 1991, rather than a sudden collapse in activity. He also pointed to June improvements across indicators as a reason not to read the quarter as a sharp deterioration.
For trading partners, the mix matters more than the single GDP print. Weak domestic demand keeps Chinese factories looking for foreign buyers, while export strength — concentrated in technology components and vehicles — pushes surplus goods into markets already debating tariffs and industrial policy.
China’s second-quarter figures captured an economy still able to ship record volumes abroad while struggling to persuade its own households to spend and its property market to stabilise.