The National Bureau of Statistics on Monday said “generally speaking”, economic development had “fully returned to normal” in the first half of the year.
The situation has been complicated by a slowdown in trade as high interest rates in the West weigh on consumer purchases of Chinese-made goods. Carlos Casanova, senior Asia economist at Union Bancaire Privée, said retail sales and consumption should be the growth engine for China this year, so the June growth figure was disappointing.He added the government would need to focus on improving private sector sentiment, especially if it wanted to reduce youth unemployment.
Private investment fell 0.2 per cent in the first half while capital expenditure cooled across the board. He said consumers were wary of spending and were instead saving. Businesses did not want to invest, while a nascent recovery in the property market early this year was “fizzling” and foreign households were spending more on services rather than goods such as electronics, hitting China’s exports.
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