Chinese economy faces challenges

The Chinese economy has faced problems as statistics for the second quarter of 2023 were not optimistic. According to the State Statistical Office of China, China's gross domestic product (GDP) grew by 6.3% year-on-year, which is less than analysts' expectations. Experts predicted GDP growth in the range of 6.9-7.3% in April-June.

Economists explain that this acceleration in annual dynamics is a result of a low comparison base due to the closure of large cities during the coronavirus pandemic. However, in quarterly terms, China's GDP growth in the second quarter was only 0.8%, a significant slowdown from the 2.2% rate in the first quarter.

According to the Financial Times, a drop in exports, weak retail sales, and the real estate crisis contributed to this result. The Chinese Statistical Office said that economic development in the country generally "returned to normal" during the first half of the year, but emphasized the complexity of the international political and economic situation, which makes a sustainable recovery difficult.

Unemployment is serious in China, especially among young people, and is the second worst on record. One in five residents of Chinese cities aged 16-24 is unemployed. Given that China is a large consumer of various goods, the slowdown in its economy has a strong impact on the global economy.

In the first half of 2023, China's GDP grew by 5.5% year-on-year. However, the Chinese government has set an economic growth target of 5% for 2023. Analysts emphasize that after a closer analysis, the economic situation in China does not look very favorable.