China's Economic Slowdown Amid Unbalanced Growth

China's economy cooled in the second quarter, as weak domestic demand and a prolonged property slump offset strong AI-driven exports. The GDP is expected to show 4.5% year-on-year growth, with limited stimulus expected. Investors await policy clues at a late-July Politburo meeting to stabilize growth.

China's economy is showing signs of cooling, with growth leaning towards the lower end of Beijing's annual target, primarily due to an entrenched slump in demand despite resilient exports.

The GDP data for the second quarter, anticipated to be released on Wednesday, projects a 4.5% year-on-year growth, marking a slowdown from the first quarter's 5% growth. This stems from weak consumption and a continued property slump, overshadowing robust AI-related export performance.

Investors are keenly anticipating a late-July Politburo meeting for insights into potential new stimulus measures to sustain growth. However, analysts project no aggressive actions unless the economic slowdown becomes more pronounced, considering China's risky but limited fiscal policy headroom.