There were more signs of a general slowdown in China’s economy in August, with retail sales growing 3.4% year on year, down from 3.7% in July, and industrial output growing at 5.2%, down from 5.7% in July. Both growth rates are the most subdued this year, amid strains from a trade war and domestic headwinds.
China’s traditional economic drivers—exports and consumer spending—are suffering, and while big money is going into newer industries, such as AI, the fruits of those labors are yet to fully materialize. The geopolitical situation is at best confused and the fundamentals of China’s relationships with Europe and the US are not in good shape. The Global South may offer some sort of a reprise, but the question is how much of the EU/US relationship it can actually replace.
China’s legislature on Friday called for faster economic growth and clear growth targets, which would suggest a return to specific targets for the 15th Five-Year Plan, which could lead to some issues including short-termism from those responsible for meeting targets. The Chinese leadership is trying hard to turn the country’s economic fortunes around, but still within the context of the prioritization of national security and solid system control.