Chinese Economy Grew at Its Slowest Pace in Three Years

The Chinese economy grew by 4.3 percent annually in the second quarter, recording its slowest growth pace in the last three years. This rate remained below the 5 percent increase in the first quarter and economists' expectations. The government's annual growth target has been pulled to the range of 4.5 to 5 percent, the lowest level in decades.

The weaknesses in the country's internal dynamics are striking; the deepening real estate crisis, stagnant job market, and increasing tendency to save suppress consumption. Moreover, rising fuel prices due to the impact of the war in Iran caused households to further restrict their spending. Although the Chinese government is trying to ease this shock by controlling pump prices, fuel costs continue to increase at double-digit rates compared to last year.

In contrast, thanks to global artificial intelligence and electric vehicle demand, production and foreign trade maintain strong momentum. In June, exports jumped by 27 percent, and the country posted a record-level trade surplus. Experts emphasize that this strong performance in exports hides other weaknesses in the Chinese economy, but it alone will not be enough to sustain long-term growth.