China’s economy grew just 4.3% in the second quarter, the slowest pace since the end of the pandemic and short of Beijing’s own target. Look under the hood, however, and the issue looks more like a consumption problem: retail sales rose a mere 1.0% in June, even as exports jumped 27% in dollar terms and industrial output grew 5.3%.
The world’s second-largest economy looks like it’s running at two speeds: An export-focused manufacturing sector that’s feeding global hunger for electronics and semiconductors, and a weaker domestic economy beset by sluggish sales, a property sector bust, and “involution,” China’s term for fierce, margin-suppressing competition.
