China’s economic recovery lost momentum in the second quarter, falling short of market expectations as Beijing desperately tries to rebuild after Covid lockdowns. Gross domestic product grew at a slower-than-expected pace of 6.3 per cent compared to a year earlier, when dozens of Chinese cities were in lockdown. It was expected to hit a full percentage point higher as the country recovered from its failed zero-Covid policies. But export demand remains stubbornly low and sinking property prices in China have weakened domestic consumer confidence. Deflation is now a major risk, while youth unemployment has climbed to more than 21 per cent. This might mean that products once destined for local consumption make it on to the international market, though, driving international prices down.
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