China’s economy at a glance, August 2024

There was nothing in China’s latest data release to fundamentally change our views around its economy – authorities continue to prioritise the supply side of the economy, which, in the face of subdued domestic demand, is expanding export volumes and leading to growing trade tensions with other major economies. Our forecasts are unchanged – we see growth at 4.7% this year (below the full year target) and easing further to 4.6% in 2025 and 4.4% in 2026.

• Growth in industrial production has trended lower in recent months, down to 5.1% yoy in July (compared with 5.3% yoy in June and 6.7% yoy in April). While conditions in construction related sectors remains weak, output in the electronics sector remains comparatively strong.

• There was a noticeable slowing in real investment growth in July, down to 2.7% yoy (from 4.4% yoy previously) – the weakest rate of growth since November 2022. While investment by SOEs still outpaces private firms, there was a notable slowing in nominal SOE investment growth in July.

• China’s trade surplus moved lower in July – down to US$84.6 billion (compared with a record high of US$99.0 billion in June). Despite the softening, this surplus was the sixth highest on record. The decline reflected a modest month-on-month easing in the value of exports and a similarly sized pickup in imports.

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