At the beginning of 2023, the general consensus was that Chinese economic growth would lend support to the global economy - even as some developed economies, including the U.S., might enter a recession. However, reality turned out to be almost the mirror opposite. While growth in developed markets - especially the U.S. - has held up relatively well, China's economic rebound has disappointed. Most data points, including the most recent July economic data, show that China's economic growth continues to falter, with the country's retail sales rising only 2.5% last month - way below the 4.5% that analysts expected.
The country also stopped providing youth unemployment data, which raises serious questions after the metric previously rose to an all-time high of 21.3% in June. Meanwhile, Chinese exports fell 14.5% in July – the second consecutive month where they fell by double digits. China’s export sector faces serious headwinds as not only are developed economies - which are major importers of Chinese goods - facing a slowdown, but Western companies are also diversifying their sourcing and lowering their reliance on China.
