China’s slowdown may be ominous

Any hopes that China’s economy would power a tailwind for the region and the world in 2023 after its reopening in late 2022 must, alas, be laid to rest.

Last week, China’s government released the data on the economy’s second-quarter performance, and they were grim. Gross domestic product (GDP) grew by just 0.8 per cent over the previous three months. Year-on-year growth was 6.3 per cent, which sounds decent until you figure that this comes off the dismally low base of a lockdown-hit economy a year ago. Ditto for retail sales, which grew just 3.1 per cent, dashing expectations of a consumption-led recovery.