Markets rose on Tuesday as data showed China’s economic growth met expectations, while optimism that governments will hammer out deals to avoid the worst of Donald Trump’s tariff threats provided support.
Beijing said gross domestic product expanded 5.2 per cent in April-June thanks to a surge in exports as businesses front-loaded shipments ahead of the US president’s stiff levies, and after the superpowers agreed to work on a long-term pact.
While the reading was slightly slower than the first quarter, it was in line with forecasts in an AFP survey and comes after figures on Monday showed exports soared more than expected in June, including a strong recovery in goods sent to the United States.
Industrial output came in above expectations.
However, Tuesday’s reports showed efforts to boost consumer activity continue to fall flat, with retail sales expanding 4.8 per cent last month, well below estimates in a Bloomberg study and highlighting the work leaders face in kickstarting the economy.
“Recent efforts to boost spending, such as the broadening of the consumer goods trade-in scheme earlier this year, did temporarily lift retail sales,” said Sarah Tan, an economist at Moody’s Analytics.
“However, this support proved unsustainable, with funding reportedly drying up in several provinces. The scheme’s limitations highlight the need for policymakers to address the deeper structural challenges behind consumer caution.”
China’s recovery has been hamstrung by a bruising trade war with the United States, driven by Trump’s sweeping tariffs, though the two de-escalated their spat with a framework for a deal at talks in London last month.
But observers warn of lingering uncertainty.
And the US president upped the ante Monday, warning Russia’s trading partners — which include China — that he will impose tariffs reaching 100 per cent if Moscow fails to end its war on Ukraine within 50 days.
Lynn Song, chief economist for Greater China at ING, said: “China remains on track to hit this year’s growth target, though a slowdown could be on the way.”
Still, after a wobble in the morning, Hong Kong rose more than one per cent while Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Mumbai and Jakarta were also in positive territory along with London, Frankfurt and Paris.
