China mostly unscathed by turbulent six months, but 2025 still an uphill climb
Advertisement
Although many believe the country can still hit its annual goal of 'around 5 per cent' for gross domestic product growth, more pressure points are expected to emerge in the latter half of the year.
After the bilateral trade war saw a
temporary de-escalation following separate rounds of talks in Geneva and London, ratings agency Fitch raised its full-year forecast for China's economy from 3.9 per cent to 4.2 per cent, even without the details of the framework to which the two countries had agreed. Other institutions remain more cautious, with Barclays holding to its below-consensus projection of 4 per cent.
While forecasts vary, financial institutions broadly agree on the challenges ahead - a downturn in exports,
persistent sluggishness in the property sector, weak domestic demand and inefficiencies in the labour market.
Although the decline in China's shipments to the US has been partially offset by heightened trade with a more diversified set of partners, Barclays forecast that export growth will slow to zero in the second half of the year, owing to a payback effect from a front-loading of orders in the first half and a projected slowdown in US consumer spending.
Advertisement
China Galaxy Securities was less optimistic, predicting that exports in the next six months will contract, with an ultimate annual growth rate of around 1.5 per cent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Standard
40 minutes ago
- The Standard
Pano Harbour in Kai Tak commencing handover for 350 units sold
From left: Johnson Wai, deputy managing director of China Resources Land (Overseas); and Samuel Leung, deputy head of sales of Poly Property (Hong Kong)
South China Morning Post
an hour ago
- South China Morning Post
The world is going all-in on stablecoins. Is China's digital yuan any different?
When South Korea reportedly halted its digital currency pilot programme this week in favour of stablecoins – cryptocurrencies pegged to a reference asset, typically a fiat currency – it sent shock waves through central banks across the world. Advertisement It also left China – a pioneer in central bank-backed digital currencies with its digital yuan, or e-CNY – with an important question to answer, namely whether it should continue to explore such digital assets or revisit the possibility of adopting the popular stablecoin format for its own purposes. At first glance, stablecoins appear to have similar qualities to the digital yuan or other digital currencies, but there are significant differences in their design, purpose and management. What distinguishes stablecoins from the digital yuan? Issued by China's central bank, the e-CNY is the digital form of China's sovereign currency. It can be used for everyday transactions such as retail payments, government disbursements, salaries and public transport fares, and does not require a bank account. First piloted in 2020, it had been used in 26 cities for transactions worth a total of 7 trillion yuan (US$977 billion) by June last year. The digital yuan is largely intended for small domestic retail payments, and it cannot be exchanged for foreign currencies. Its cross-border use is being developed through the mBridge project, coordinated by the multinational Bank for International Settlements. Advertisement Unlike the digital yuan, which is entirely under the umbrella of a central bank, stablecoins are blockchain-based and privately issued cryptocurrency tokens pegged to fiat currencies like the United States or Hong Kong dollars. Issuers hold reserve assets, such as US Treasury bills, to back the total value of the tokens at a ratio of one to one.
South China Morning Post
an hour ago
- South China Morning Post
Hong Kong's May retail sales up 2.4%, ending 14-month contraction
Hong Kong's retail sales in May jumped by 2.4 per cent year on year, marking a reverse in fortunes after the city contended with a 14-month contraction, with the uptick boosted by a surge in visitors during several 'golden week' holidays. Provisional figures released by the Census and Statistics Department on Wednesday showed total retail sales in May reached HK$31.3 billion (US$3.9 billion). The figure represents the first time sales have grown since February 2024, when the city recorded an increase of 1.9 per cent year on year. A total of 1.1 million people visited Hong Kong during mainland China's five-day Labour Day golden week holiday , which ran from May 1 to 10, a rise of 22 per cent from last year – exceeding the government's original estimate of 10 per cent. But a government spokesman said industry players still needed to adapt to changes in consumption patterns despite the improvement of sales in May. 'While the retail sector continues to adapt to the changes in consumption patterns, the government's proactive efforts in promoting tourism and mega-events, in tandem with the increase in employment earnings and sustained steady growth of the mainland economy, will help bolster consumption sentiment and support the consumption market,' he said.
