Economic Growth and Demand - China's GDP grew by 5.3% year-on-year in the first half of the year, showing resilience despite a complex internal and external environment [2] - Investment growth rate decreased from 4.2% in Q1 to 2.8% in H1, below last year's annual growth rate of 3.2% [2] - Consumer spending increased from 4.6% to 5% year-on-year, but June's growth of 4.8% was a decline from May [2] Price Levels and Market Dynamics - June's CPI rose by 0.1% year-on-year, significantly below the 2% annual target, while PPI's decline expanded from -2.2% to -3.6% [3] - The persistent low price levels indicate a significant supply-demand imbalance, leading to reduced confidence among businesses and consumers [3][4] - Market mechanisms are exacerbating demand contraction, as low prices lead to cautious investment and consumption behaviors [3][4] Investment Trends - Investment growth in Q2 showed a notable decline, influenced by falling market prices and cautious corporate outlooks [7] - Real estate investment fell by 11.2% year-on-year in H1, with a 9.9% decline in Q1, reflecting weak demand and market sentiment [7][8] - The manufacturing sector's investment growth decreased due to negative expectations regarding future sales and profitability [7] Government Role and Policy Recommendations - The government is urged to increase public investment to counteract demand contraction and stimulate economic growth [9][11] - There is a need for a proactive macroeconomic policy to address the prolonged demand contraction and its underlying issues [9][10] - The government has the capacity to enhance public goods and services, which can effectively stimulate demand and support economic recovery [10][12]

Core Viewpoint - The 5.3% GDP growth in the first half of the year indicates the strong resilience and growth potential of the Chinese economy, despite a decline in growth rates in the second quarter and ongoing macroeconomic imbalances [1][4][5]. Economic Performance - The GDP growth rate for the first half of the year was 5.3%, with a quarterly breakdown showing 5.4% in Q1 and 5.2% in Q2 [2][3]. - The economic performance is considered stable and shows progress, especially given the challenging international environment [2][4]. - The contribution of final consumption expenditure to economic growth was 52% in the first half of the year, highlighting its role as a key driver [9]. Consumption Trends - Consumption has been a significant stabilizing force for economic growth, with a contribution rate of 82.5% and 44.5% expected for 2023 and 2024, respectively [8]. - Retail sales of consumer goods increased by 5.0% in the first half of the year, surpassing previous year’s growth [10]. - Policies promoting consumption, such as trade-in programs, have significantly boosted retail sales in various categories [11]. Investment Dynamics - Fixed asset investment reached 24.9 trillion yuan, with a nominal growth of 2.8%, lower than the previous year [14]. - The decline in investment growth is attributed to external uncertainties, internal price declines, and cautious investment decisions by market participants [15][16]. - Despite the slowdown, there remains significant potential for fixed asset investment, particularly in high-quality development sectors [17]. Future Outlook - Experts predict that while GDP growth may face downward pressure in the second half of the year, the overall target of around 5% is still achievable [22]. - The need for effective investment expansion is emphasized, particularly in stabilizing the real estate market and enhancing the efficiency of manufacturing and infrastructure investments [19][24]. - Continued government support for consumption and investment is crucial to maintain economic momentum [23][24].