China's Economic Slowdown Signals Need for Stimulus

China's economy slowed in the second quarter, growing just 4.7% due to a prolonged property downturn and job insecurity. This has raised expectations for more stimulus from Beijing. Economic confidence is challenged by conflicting goals of boosting growth and cutting debt, and ongoing trade tensions.

China's economy decelerated in the second quarter of 2024, with growth recorded at 4.7%, according to official data released Monday. The slowdown, attributed to a protracted property slump and persistent job insecurity, has fueled speculation that Beijing will need to introduce additional stimulus measures.

The world's second-largest economy missed analysts' forecasts of 5.1% growth, following a 5.3% expansion in the previous quarter. Citi analysts highlighted that soft domestic demand could weigh on inflation and erode production strength, with significant attention on the upcoming third plenum and Politburo meeting in July.

The government aims for approximately 5.0% growth for 2024, a goal that might demand further economic intervention. China has been boosting infrastructure investment and channeling funds into high-tech manufacturing to counteract domestic demand woes and a property crisis.