- China released a batch of disappointing data Monday.
- Its economy grew 6.3% over the second quarter, falling short of forecasters' expectations.
- Retail sales also faltered, signaling the country’s post-COVID revival is fizzling out.
China has released a fresh batch of economic data – and it makes grim reading for Beijing.
The country can add below-par growth and faltering retail sales to a growing list of red flags that signal its hopes for a post-COVID economic revival have been scuppered.
Here are the key data points the National Bureau of Statistics reported Monday:
- China's Gross Domestic Product rose 6.3% in the three months ending June 30, up from 4.5% in the first quarter but well below the 7.3% figure economists polled by Reuters were expecting.
- Retail sales growth slowed to 3.1% in June, down from 12.7% the previous month.
- The Consumer Price Index, which tracks inflation, rose just 0.7% year-on-year over the first six months of 2023. (Here's why that's a bad thing).
- Youth unemployment surged, with 21% of 16- to 24-year-olds out of a job as of the end of last month.
- Disappointing trade figures showed exports – a huge economic engine for China – fell 8.3% year-on-year in June, while imports slipped 2.6% over the same period.
Beijing finally lifted its harsh zero-COVID restrictions at the end of 2022, sparking hopes of a rapid recovery for the world's second-largest economy.
But this latest heat check suggests that's nowhere near happening right now, with the country's post-pandemic economic reboot falling well short of expectations so far.
"The pandemic hangover is plaguing China's recovery, Moody's Analytics economist Harry Murphy Cruise said in a research note.
"Increasingly, 2023 is looking like a year to forget for China."
Investors also appeared to see Monday's data as worrying, with the CSI 300 and Shanghai Composite stock-market indices each having fallen just under 1% by the closing bell.
China's ruling Politburo is set to meet later this month, and economists expect it to discuss potentially bringing in a stimulus package to boost the country's sputtering growth.
The People's Bank of China has already cut key borrowing rates in a bid to boost spending levels, but policymakers may be forced to consider more drastic measures to stop the Year of the Rabbit turning into a nightmarish 12 months for the economy.
"Fading GDP growth and soft June data should add to the market narrative that the recovery momentum is coming off and more forceful policy support is warranted," UBS's CIO for global wealth management Mark Haefele said in a note to clients seen by Insider.
"We won't anticipate a return to 'bazooka stimulus' policy of prior crisis years, but we do anticipate more measures in the coming weeks," he added.