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China's Q2 growth cools to 4.3%, missing forecasts, highlighting weak domestic demand that keeps the yuan weakened despite Xi Jinping's desire for a stronger currency.
The Chinese yuan is between 20% and 30% below its true value, former senior U.S. Treasury official Mark Sobel estimates, according to an Aug. 4 Wall Street Journal column. Sobel, chief economist at the Official Monetary and Financial Institutions Forum, ties the undervaluation to China's high savings, state-directed investment and dependence on exports.
Chinese regulators acknowledged that the country's stock market swings are being driven by sentiment in the United States and South Korea, undercutting Beijing's long-running narrative of technological self-reliance, The Wall Street Journal reported. A fund manager told WSJ that mainland stock moves are 'driven by the AI trade in the United States,' and regulators pointed to 境外输入性风险, or risk imported from abroad, as the culprit behind a selloff this month.
China's economy expanded 4.3% in the second quarter from a year earlier, official data showed Wednesday, falling short of the 4.5% forecast by economists polled by The Wall Street Journal as weak domestic demand and a pullback in local-government spending weighed on growth. Growth slowed from 5.0% in the first quarter.