Analysts expect imports to continue to increase in the coming months. Beijing will view domestic demand as its top priority and will therefore offer further support.
China’s consumer price growth also rose more than expected in July, reaching a five-month high.
Amid a general economic slowdown, Chinese consumers are unwilling to spend because of the ongoing sluggish real estate market and gloomy labor market situation; the consumer price index has stagnated at around zero since April last year.
But last month it was food prices that drove a surprise rise in the consumer price index, and analysts expect that increase to continue in the coming months.
However, these hopes are accompanied by caution. Observers added that this should not be a sign for Beijing to change its plans for further monetary easing. Interest rate cuts are expected to continue this year.
60-second catch-up
Deep dives
This economist says China’s housing oversupply is far from over. Here’s why
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The rise in private debt and the collapse in real estate values show that a liquidation of the real estate market and cash handouts are necessary to stimulate consumer demand
Mao Zhenhua is the founder of the China Chengxin Credit Rating Group and co-director of the Institute of Economic Research at Renmin University. He regularly comments on the Chinese economy, has been a professor at the Business School of the University of Hong Kong since 2022 and was one of the first to warn about the underlying pressure on real estate prices in China.
Former World Bank economist explains why ‘China will not be fooled’ and Japan’s fate will escape
Justin Lin Yifu is an economics professor at Peking University and former chief economist at the World Bank. His theory of the “new structural economics” – which advises governments of developing countries to take an active role in building and optimizing their industrial base – is believed to have influenced Beijing’s economic policy over the past decade. He predicted that China would “overtake the United States in terms of market exchange rates by 2030” and overcome the middle-income trap “within two or three years.” He served as an adviser to China’s State Council from 2013 to 2023.
Concerned about “overdependence”, ASEAN is erecting further trade barriers against China
Beijing’s strategy to reshape China’s trade profile to boost exports to Southeast Asia has been tested by a growing number of trade barriers in the region responding to shifts in supply chains, analysts say, adding that the restrictions have come at a time of weaker shipments to the 10-nation bloc.
China is facing a wave of trade restrictions due to concerns about industrial overcapacity – because the country produces more of certain goods than it can sell or consume. Late last month, Vietnam also became one of the last countries to officially launch an anti-dumping investigation into certain types of hot-rolled steel from China and India.
Was the stock market crash a warning signal for China’s most important exports or just a blip?
There are warning signs for the Chinese economy – whose export sector was a key growth driver in the first half of the year – after concerns about a recession in the US triggered a massive sell-off in global stock markets earlier this week.
Yield-hungry Chinese retail investors looked abroad – then came Monday
While some are feeling the consequences of their situation and are considering whether to cut their losses and exit these markets altogether, most say they will maintain their stance and choose to hold their positions and not move their remaining capital to domestic exchanges.
Can Shenzhen’s indoor ski resort, popular with Hong Kong residents, boost Chinese spending?
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China is actively promoting winter sports to boost domestic consumption. Indoor ski resorts in Shenzhen are becoming increasingly popular, including among Hong Kong residents.
Average temperatures in China hit record highs in July, but Shenzhen’s indoor ski resorts provided a stark contrast to the heat that had descended on China’s southern tech hub, while also driving up demand for cooling that is weighing on the economy.
With subzero temperatures, artificial snow, glass igloos and customers wrapped up in colorful ski gear, indoor skiing in Shenzhen has proven to be a surprise hit: According to CCTV, bookings via Chinese shopping platform Meituan almost tripled in July compared to the previous month.
Global Impact is a weekly newsletter on a news topic originating in China and having significant macroeconomic impact on our news readers around the world.
