This episode contains segments on China’s Q2 GDP growth data and other economic indicators, such as industrial production, retail sales and foreign trade data from the first half of 2023 and June. China’s industrial production expanded 4.4% in June but the increase in retail sales dropped; the total value of China’s exports fell at the steepest rate in over three years in June, while the value of imports declined for the eighth consecutive month; the German Federal Government released its first strategy on China on 13th July. From the Chamber side, on 13th July, the Institute of European Studies of the Chinese Academy of Social Sciences and the Beijing Municipal Commission of Development and Reform held a roundtable with the European Chamber and its member companies to understand the current situation of European business in Beijing.
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Readmore:
China’s Q2 GDP and H1/June economic indicators (in Chinese):
http://www.stats.gov.cn/sj/zxfb/202307/t20230715_1941271.html
China’s June and H1 foreign trade data (in Chinese):
http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/5150374/index.html
Germany’s China strategy:
Roundtable meeting with CASS Institute of European Studies and Beijing Municipal Commission of Development and Reform:
https://www.europeanchamber.com.cn/en/lobby-actions/6498
Transcript:
XINHE: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
XINHE: The growth of China’s gross domestic product accelerated from the first quarter of 2023, but the rate of increase lagged expectations for the second quarter.
MARIANN: According to China’s statistics bureau, the country’s GDP increased 6.3 per cent in the second quarter, compared to the same period last year, with stronger growth than in the first quarter. However, this was partly due to a comparatively low base from last year, as China’s economic performance came under substantial pressure from the lockdown of Shanghai and other cities in the second quarter of 2022. On a quarter-on-quarter basis, China’s GDP rose 0.8 per cent, which indicated a slowdown after the 2.2 per cent growth recorded in the January-March period.
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XINHE: Along with the latest GDP data, the National Bureau of Statistics also released a host of economic indicators on 17th July. Industrial production at larger firms showed signs of strengthening, but slowing growth in retail sales indicated a further dip in consumption.
MARIANN: Industrial production expanded 4.4 per cent in June from the same period last year, which was above expectations and also above the rate of growth recorded in May. In the first half of 2023, production at state- and equity-owned companies expanded over 4 per cent, while at private-owned firms the rate of growth was less than 2 per cent; at foreign-owned companies it didn’t even reach 1 per cent. The increase in retail sales dropped sharply from May to June, falling to the lowest level recorded all year. A factor that is likely undermining a stronger recovery in spending is that urban youth unemployment has been soaring in the first half of the year, hitting a new record of 21.3 per cent in June.
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XINHE: The total value of China’s exports dropped at the steepest rate in over three years in June, while the value of imports declined for the eighth consecutive month.
MARIANN: In dollar terms, exports fell 12.4 per cent in June, with the rate of contraction exceeding analysts’ expectations and accelerating from the level recorded in May. In the first half of 2023, total export value declined 3.2 per cent compared to the same period last year, as global demand for Chinese goods remained relatively weak, partly due to inflation pressure dampening consumption in several markets. At the same time, sluggish domestic demand weighed on China’s imports too, with the total value 6.8 per cent in June, and 6.7 per cent in the first half of 2023 from a year ago.
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XINHE: On 13th July, the German Federal Government released its first strategy on China, highlighting that while there is a need to reduce risks in certain areas, in others, there is still vast scope for cooperation.
MARIANN: The document stressed that it is not Germany’s intention to impede China’s economic progress and development or to decouple from its economy. However, it highlighted that there is a need for de-risking, in order to reduce dependencies in critical areas. To this end, the German government called on companies to take geopolitical risks into account in their decision-making, so that in case of a geopolitical crisis, there would be no need for companies to rely on state funds. At the same time, the strategy listed the fight against climate change and biodiversity protection among the areas where Germany intends to strengthen its cooperation with China.
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XINHE: On 13th July, the Institute of European Studies of the Chinese Academy of Social Sciences and the Beijing Municipal Commission of Development and Reform held a roundtable with the European Chamber and its member companies to understand the current situation of European business in Beijing.
MARIANN: At the event, the European Chamber provided an overview of how the operations of European companies in Beijing have been affected by the COVID-19 pandemic and Russia’s invasion of Ukraine. Among other topics, further discussions focused on European companies’ views on China’s economic outlook, as well as the difficulties they face in Beijing.
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XINHE: Thanks for listening. Tune in again next week.
MARIANN: In the meantime, please find useful links in the episode notes.