China's Economy Struggles to Shift into High Gear
China's economy continues to face headwinds from a slowing real estate sector, with property investment down 10.8% year-over-year.
China EconomyReal Estate SectorFixedasset InvestmentRetail SalesGdp Growth RateReal EstateAug 15, 2024
Data released Thursday shows China's fixed-asset investment expanded by 3.6% year-over-year in the first half of 2024, falling short of expectations. The weak data was mainly fueled by slowing infrastructure investment, according to analysts from Goldman Sachs, who pointed to a drag from heavy rainfall and flooding.
Meanwhile, real estate investment remains the economy's key sore spot, with a 10.8% year-over-year fall. The data shows new-home prices across 70 of the country's biggest cities fell 5.3% year-over-year in July, following a 4.9% decline in June. China's housing market has been battered by slowing property sales and starts in the last few years, and its struggles seem far from over as a sizable portion of its available housing stock remains empty.
One bright spot was retail sales, which increased 2.7% year-over-year in July, above analysts' estimates and up from a 2% increase in June. The jump was fueled by online sales, partly due to the 618 Online Shopping Festival online retail event, which came earlier and lasted longer than usual, the Goldman analysts said.
Slowing demand within China raised warning signs last month, especially as potential tariffs threaten the country's strong exports. The government has rolled out a range of new policies meant to stimulate consumer spending as well as raise household income in the last few months.
Frequently Asked Questions
What is the current state of China's economy?
China's economy is still stuck in low gear, with fixed-asset investment posting an unexpected decline in the first half of the year.
What is the main reason for the decline in China's fixed-asset investment?
The weak data was mainly fueled by slowing infrastructure investment, according to analysts from Goldman Sachs, who pointed to a drag from heavy rainfall and flooding.
How is China's real estate sector performing?
Real estate investment remains the economy's key sore spot, with a 10.8% year-over-year fall. The data shows new-home prices across 70 of the country's biggest cities fell 5.3% year-over-year in July, following a 4.9% decline in June.
What is the outlook for China's GDP growth rate?
Goldman analysts believe that the country's goal of an approximately 5% GDP growth rate for 2024 may be at risk, and expect more demand-side easing measures in coming months.
What is the 618 Online Shopping Festival?
The 618 Online Shopping Festival is an online retail event that came earlier and lasted longer than usual, which contributed to the jump in online sales and retail sales in July.
Related News Articles
Maharashtra Proposes New 180m Height Cap for Taller Skyscrapers in Mumbai
Maharashtra is planning to increase the height limit for high-rises from 120m to 180m, a move that has been met with enthusiasm by the real estate industry. This new proposal could reshape Mumbai's skyline and open up new opportunities for development.
Bollywood's Real Estate Investments: Stars Diversify Wealth with Smart Property Moves
From luxurious apartments to sprawling commercial spaces, Bollywood stars are making smart moves in the property market, diversifying their wealth and securing their financial futures.
Arkade Developers Aims for Rs 21 Billion Revenue from New Projects
Arkade Developers, a prominent player in the real estate market, is set to achieve a significant milestone with its ambitious plan to generate Rs 21 billion in revenue from three new projects. The company's focus on redevelopment is expected to play a cru
Maharashtra Cabinet Waives Toll Tax for LMVs at Mumbai’s Five Entry Points
The Maharashtra government has approved a waiver in toll tax on light motor vehicles (LMVs) at Mumbai’s five entry points, providing relief to daily commuters and residents.
Pattaya: The Next Big Thing for Indian Property Investors
Pattaya, a popular coastal city in Thailand, is rapidly emerging as a lucrative destination for Indian real estate investors. Discover why this Southeast Asian gem is becoming a top choice.
CM Fadnavis Outlines Maharashtra's Vision for a $1 Trillion Economy and BMC Polls
Maharashtra's Chief Minister, Devendra Fadnavis, has set an ambitious goal for the state to become a $1 trillion economy. He also addressed the upcoming BMC polls, emphasizing the state's commitment to development and governance.