China's Q2 growth falls short; retail sales hit 18-month low

China's economy grew less quickly than anticipated in the second quarter of 2024, rising 4.7% from April to June — the lowest growth rate since early 2023 and less than the 5.1% predicted. The extended housing collapse and job instability were blamed for the slowdown, which reduced consumer spending and resulted in an 18-month low in retail sales growth. Amid trade volatility and deflationary pressures — an aging population, and a dropping birth rate are also contributing to China's economic issues, which might jeopardize the country's long-term economic growth and social stability. More recently, China plans to generate over 12 million new urban jobs this year and has set an ambitious growth target of over 5 percent for 2024. These objectives highlight China's emphasis on job growth and economic revival as the nation attempts to manage demands from both the inside and outside. The People's Republic of China saw growth of 5.2% in 2023, with a GDP of over 126 trillion RMB ($17.5 trillion). Ultimately, analysts predict that sluggish wage growth, declining real estate and stock prices, and continuous cost-cutting initiatives across industries will make it difficult to meet the 5% growth objective by 2024. "Youth unemployment, coupled with unease about the real estate market, will both have effects," Ben Cavender, managing director of the China Market Research Group told Jing Daily. "Gen Z consumers were already looking for a more authentic connection with brands before the economy slowed down and this trend has accelerated as their job prospects have waned." With anticipation of policy easing in the housing and fiscal sectors to boost domestic demand, the government may need to enact more stimulus measures to support economic recovery. An although the luxury market still exists, brands will need to put in a lot more effort to connect with Chinese consumers.

China's Q2 growth falls short; retail sales hit 18-month low

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Published July 18, 2024

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China's Q2 growth falls short; retail sales hit 18-month low