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China growth mix shifts toward exports as domestic demand lags
China’s H1 data showed industrial and high-tech production growth outpacing pressure in retail sales and property investment, with real estate development investment down 18.0% year over year.
BNY analyst Geoff Yu, via FXStreet, says China’s first-half economic data point to resilient industrial and high-tech output but weaker domestic demand, leaving the growth mix more dependent on exports and exposed to trade friction.
According to the National Bureau of Statistics, the economy “operated within an appropriate range” despite an increasingly unstable external environment, citing stable employment, mild price increases, solid foreign trade, and rapid development of new growth drivers.
Industrial value added rose 5.4% year over year in the first half, manufacturing gained 5.6% and high-tech manufacturing grew 13.3%, with June output accelerating to 5.3% from 4.5% in May.
Still, investment and property data were the main weakness: fixed-asset investment excluding rural households fell 5.7% year over year in H1, while real estate development investment dropped 18.0%, FXStreet notes, reinforcing BNY’s view that China faces a stronger case for reflation efforts.