China’s statistics bureau on Monday reported a solid expansion for the country in the first part of 2024, but analysts say the ongoing asset crunch and the slow call for domestic investment continue to weigh on the world’s second-largest economy.
Meanwhile, the U. S. economy is expected to stabilize in the second half of 2024 and into next year, currency audit and advisory firm Deloitte predicts, and clients are calling for staying strong. Updated official figures for the United States will be published on July 25.
China’s National Bureau of Statistics reported on Monday that the country’s GDP grew by 5% in the first part of 2024. The second quarter recorded an expansion rate of 4. 7% year-on-year, down from the 5. 3% expansion. % of the first quarter. indicating a slower speed but still physically powerful compared to other primary economies.
“Although GDP expansion in the second quarter is lower than in the first quarter, it is still a rapid expansion among primary economies, which offers a solid basis for reaching the annual GDP target,” the state-run Global Times quoted it as saying. The Chinese economist Chen Fengying, as said.
Beijing has again set an economic expansion target of “around 5%” this year, after reaching 5. 2% in 2023. Many experts in the field, including China’s former number two Li Keqiang, have taken the country’s expansion figures literally.
The release coincided with the start of the third plenum in Beijing, where the most sensible officials are expected to talk about reforms aimed at boosting economic expansion in the second half of the year.
“After a dynamic start to the year thanks to infrastructure and debt measures at the end of 2023 and physically strong exports, the economy returned in the second quarter to just under 3% annualized GDP expansion, which is totally consistent with its medium-term performance. final estimate of long-term expansion,” George Magnus, an associate at Oxford University’s China Center and former lead economist at investment bank UBS, told Newsweek.
He noted that the still weak income after the pandemic and the current real estate crisis, which began with the default of the mega-developer Evergrande in 2021, continue to hinder the country’s expansion prospects.
Retail sales of goods, an indicator of domestic demand, rose 3. 7% year-on-year, a lower margin than the 7. 2% reported for 2023.
“The long-term trajectory of our economy remains strong and healthy, the momentum for progress remains strong, and our commitment to high-level opening-up remains as strong as ever,” said Liu Pengyu, a spokesman for the Chinese embassy in the United States. Formation
He highlighted the double-digit expansion seen in smart and green sectors, in line with President Xi Jinping’s vision of “new and productive forces” as the future of the economy. The production of electric cars increases by 34. 3%, that of 3D printers by 51. 6% and that of embedded circuits by 28. 9% year-on-year.
Liu added that the Third Plenum will strengthen connectivity between China and the world and “draw up a new plan for China’s economic and social development. “
Washington reported a slower GDP expansion rate of 1. 4% year-on-year during the first quarter, compared to a 3. 4% expansion in the third quarter of 2023.
The U. S. Department of Commerce’s Bureau of Economic Analysis attributed the first-quarter expansion to increased customer spending, real estate investment, business investment and state and local government spending, offset by a relief in investment in inventories and an increase in imports. .
The Dow Jones hit an all-time high on Tuesday after the U. S. Census Bureau released an initial estimate of customer demands for June. Retail sales are estimated to have increased by about 2. 5% over the same period last year, excluding value changes.
Deloitte economist Robyn Gibbard noted in a study published last month that the U. S. economy grew more slowly in the first quarter and forecast that expansion would reach 2. 4% for all of 2024 before falling. slowing to a more modest speed of 1. 1% next year.
However, the analyst remains optimistic. Consumer spending is expected to hold up in the first part of 2024 due to sustained innovations in the hard-work market and strong spending grades from the corporate and government sectors,” he wrote.
The Chinese economy, once the largest economy in the world, is no longer on that trajectory.
World Bank insights show that the gap between the two largest economies widened last year. China’s length is only two-thirds that of the United States, up from 70% in 2022 and 76% in 2021.
Update 7/19/24, 1:40 p. m. ET: This article has been updated with a comment from the Chinese embassy and more context.
Micah McCartney is a Newsweek reporter in Taipei, Taiwan. It covers United States-China relations, security issues in East and Southeast Asia, and China-Taiwan relations.
You can contact Micah by emailing m. mccartney@newsweek. com.
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