Economic Slowdown Hits China as Real Estate Market Struggles

The economic growth in China experienced a significant slowdown during the spring season following a robust start earlier this year. Data released recently indicates that the world’s second-largest economy faced challenges as a result of a real estate downturn, leading to more cautious consumer spending.

The latest statistics covering the period from April to June have added pressure on the Communist Party as its leaders convene in Beijing for a four-day meeting to chart the economic course of the country. The gathering, known as the Third Plenum, occurs approximately every five years and holds great significance for China’s economic future.

In preparation for the meeting, the Chinese government has tightened control over information flow, evident in the cancellation of the National Bureau of Statistics’ regular news conference accompanying the data release. Additionally, Chinese companies have mostly refrained from publishing earnings reports this week.

China’s economy recorded a 0.7 percent growth in the second quarter compared to the previous three months, falling below the expectations of many economists. Extrapolating this figure for the entire year indicates an annual growth rate of approximately 2.8 percent, significantly lower than the rate observed in the first quarter of the year.

Furthermore, the statistical bureau revised down its growth estimate for the first quarter, revealing a projected annual growth rate of around 6.1 percent, contrary to the initially reported 6.6 percent in April.

As China’s top leader, Xi Jinping faces the challenge of restoring confidence in his policies amidst the economic slowdown and the struggles in the property market.