China’s economy lost momentum in the second quarter with GDP growing just 6.3%, well below the 7.1% expectation.

The statistics bureau’s press briefing begins with its spokesman, Fu Linghui, proudly proclaimed that China’s economy improved in the first half despite the grim and complex international environment.

However, bear in mind that the 6.3% YoY growth rate - already quite a bit less than economists estimated - is less impressive when you consider it compares to a quarter in 2022 when Shanghai was under lockdown and other cities faced severe Covid-related restrictions.

The rest of the major macro data was more mixed (though with a downside bias):

The growth of China's home sales slowed, while property investment and new construction fell deeper, official data showed.

With China's extreme Zero-COVID policies now in the distant past, the difficulties facing the world's second-largest economy will further increase global growth fears and lead to increasing calls for Beijing to do more to shore up confidence (i.e. unleash broader stimulus measures).

Ho Woei Chen, economist at United Overseas Bank says the GDP is “a big disappointment”:

“But June data is still mixed. The industrial production was better than expected and picked up from May. The weak domestic demand will be of great concern and this will be the target for its monetary and fiscal stimulus.”

The problem with those demands is that credit (stimulus) actually rose more than expected...

Finally, and in fact probably even more critical than the actual GDP print, China's youth unemployment rate rose to another new record high of 21.3% in June (dramatically worse than the 5.2% nationwide surveyed jobless rate)...

Source: Bloombrg

Of course, China does have a simple solution for this record youth unemployment... "it is becoming increasingly uncomfortable that the world’s concerns of a coming war in Taiwan are intensifying at the very same time that China’s youth unemployment is surging."