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China’s economy expanded by a slower-than-expected 4.3 per cent year-on-year in the second quarter, missing Beijing’s annual growth target of 4.5 to 5.0 per cent.
While a massive surge in artificial intelligence exports helped fuel the economy, a prolonged property crisis and weak domestic spending continued to drag down overall growth.
Ongoing shipping disruptions in the Strait of Hormuz, caused by the conflict in the Middle East, also threatened China’s export-reliant recovery.
Despite the GDP miss, the National Bureau of Statistics reported that retail sales grew by 1.0 per cent in June, while industrial production rose 5.3 per cent to beat analyst forecasts.
Furthermore, a global AI boom drove a 27 per cent surge in June exports, with semiconductor shipments more than doubling in value.
However, economists warned that a severe shortage of memory chips artificially inflated these export values while actual shipment volumes declined.
Looking forward, China still faces significant economic hurdles both at home and abroad.
While retail and industrial numbers offered some hope, fixed-asset investment fell 5.7 per cent in the first half of the year.
Additionally, unresolved trade tensions with both the United States and the European Union continue to threaten China’s vital export markets.
