China’s Growth Squeezes While Green Trade Surges
China’s official GDP rate fell to 4.3% in the second quarter, a two‑quarter decline from the 5% gain earlier in the year and below Beijing’s 4.5‑5% target set for the period. The slowdown follows the start of the Iran war, which pushed oil prices higher and dampened domestic demand.
In contrast, the export story is robust: June record exports rose 27% year‑over‑year. A key driver is electric vehicle exports, which topped one million units for the first time, cementing China’s leading role in clean mobility. Semiconductor shipments to AI data centres also rose sharply, reflecting global appetite for chips that support artificial intelligence services.
Oil price volatility has translated into higher energy costs for Chinese firms, curbing consumption and spending within the domestic market. The National Bureau of Statistics highlighted a growing imbalance between strong supply lines and weak demand, signalling structural restraints in the economy.
Another domestic headwind is the property market, where new home prices declined for a third month. Retail sales swung from a 0.6% dip in May to a modest 1% rise in June, signalling consumer confidence that remains fragile.
Despite these challenges, green industry sectors continue to expand. The surge in EV exports aligns with global climate commitments to reduce vehicle emissions. Meanwhile, the burgeoning AI chip market underscores China’s influence in the high‑tech supply chain, though it also raises questions about energy use and the need for greener data‑centre cooling solutions.
Looking forward, China’s policymakers face the dual task of cushioning sluggish domestic demand while keeping green trade on an upward trajectory. Flexible growth targets and supportive measures for property and consumer sectors could help. At the same time, investments in renewable energy and efficient data‑centres are essential to ensure that rising export volumes do not offset the environmental gains of the country’s clean technology boom.
