China Q2 GDP growth was reported at 10.3%, slowing down from Q1 growth rate of 11.9%. The slowdown came despite exports were stronger in Q2, meaning internal demand has weakened.
Chart 1. China GDP Quarterly Growth¸
Urban fixed assets investments growth rate also slowed down to 23.5%. The May reading was at 25.9%.
Chart 2. Fixed Assets Investment
Inflationary pressures are slowing down. Consumer price inflation in June was at 2.9% vs. 3.1% in May. June producer price inflation was at 6.4% compared with 7.1% in May. Again producer prices are growing faster than consumer prices squeezing profit margins.
Chart 3. Producer & Consumer Price Indexes
Industrial production growth also decreased to 13.7% in June vs. 16.5% in May.
Chart 1. China Industrial Production
All in all, question remains is this slowdown a result of intentional tightening induced by Chinese government or is the Chinese economy growth slowing down because of its unsustainable structure.







