The growth rate marked a slowdown from the 5.3 per cent growth observed in the first quarter.
The GDP growth rate for 2023 was around 5.5 per cent, down from previous double-digit growth rates seen in earlier decades.
Efforts to curb pollution and promote green development, while crucial for long-term sustainability, have also impacted industrial output and economic growth rates.
"Key priorities include rebalancing the economy towards consumption by strengthening the social safety net and liberalising the services sector to enable it to boost growth potential and create jobs," she said.
"The way to do that is to continue with economic reforms.
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China's GDP grew by 4.7 per cent in the second quarter compared to the previous year, which was below expectations of a 5.1 per cent increase. The growth rate marked a slowdown from the 5.3 per cent growth observed in the first quarter. It is at the worst pace in five quarters, adding pressure on Beijing to boost confidence as top leaders start a twice-a-decade policy meeting on Monday.China's ruling Communist Party has commenced its so-called third plenum, a major meeting held roughly once every five years to map out the general direction of the country's long-term social and economic policies. Its Central Committee convened the plenary session, or plenum, the third since its members were elected during the party's last congress in 2022, to deliberate on a key policy document on deepening reforms and advancing China's modernisation.The slowdown reflected in the data — the first set of quarterly indicators free of distortions by the pandemic — could strengthen calls for Beijing to ramp up efforts to stimulate growth. They were published the same day President Xi Jinping was set to convene the third plenum meeting to set major economic and political policies for the coming years.China needs to “fully estimate difficulties, challenges and uncertainties in development” while strengthening confidence in the economy going forward, and implement macroeconomic policies well to promote a healthy growth, the NBS said in a statement accompanying the release.The economic landscape in China has shown disparities, with industrial output surpassing domestic consumption. This has heightened deflation concerns amid a downturn in the property sector and increasing local government debt. Despite resilient Chinese exports offering some stability, escalating trade tensions now pose a significant risk.China has been experiencing a shift from high-speed growth to a more moderate pace in recent years. The GDP growth rate for 2023 was around 5.5 per cent, down from previous double-digit growth rates seen in earlier decades. The shift in China's economic growth from high-speed to more moderate levels in recent years can be attributed to several interrelated factors.According to the World Bank, China has been undergoing a shift from an investment-driven growth model to one that emphasises consumption and services. Investment in infrastructure and heavy industries, which previously drove rapid expansion, has slowed as the economy matures.Moreover, China's demographic dividend, which provided a large and youthful workforce, is diminishing as the population ages. An ageing population reduces the labour force participation rate and limits the potential for rapid economic expansion. According to the Council on Foreign Relations, escalating trade tensions with the United States and other major economies have weighed on China's export sector and overall economic confidence.Tariffs and trade barriers have disrupted supply chains and reduced global demand for Chinese goods. China faces significant environmental challenges stemming from decades of rapid industrialization. Efforts to curb pollution and promote green development, while crucial for long-term sustainability, have also impacted industrial output and economic growth rates. According to the China Economic Review, the transition to a more innovation-driven economy requires time and resources, which may temporarily affect overall GDP growth rates.Since lifting more than 800 million people out of poverty since the late 1970s, China now lies at a crossroads where observers fear the world's second-largest economy could settle into a long period of low growth or even Japan-like deflation. The third plenum this week will help China better navigate complexities in global landscapes, advance its economic transformation, and enhance the people's "sense of gain", state media has cited Chinese think-tanks as saying.At the last fifth plenum in 2020, the party said it aimed to boost per capita GDP to the level seen in moderately developed nations by 2035. By that time, disparities in urban-rural development, in development between regions, and in living standards will be significantly reduced, it said. The modernisation of China's military will also be "basically" achieved.The third plenum will outline efforts to promote advanced manufacturing, revise the tax system to curb debt risks, manage a vast property crisis, boost domestic consumption and revitalise the private sector, policy advisers have said.Goldman Sachs on Monday lowered its forecast for China's 2024 gross domestic product to 4.9% from 5.0% on the back of data showing that the country's economy slowed in the second quarter. "To counteract weak domestic demand, we believe more policy easing is necessary through the remainder of this year, especially on the fiscal and housing fronts," said Goldman Sachs economists, led by Lisheng Wang.In May, the IMF projected China's economic growth at 5 per cent, up from its earlier forecast of 4.6 per cent, but cautioned it of a slowdown to contract to 3.3 per cent by 2029 due to ageing and slower productivity growth and suggested to boost productivity to continue with economic reforms . The 5 per cent growth revision by the IMF is in line with the target set by the Chinese government for the world's second-largest economy which is grappling with a slowdown triggered by the crippling property sector crisis and industrial overcapacity.China's property sector, the dominant component of the Chinese economy in the last few years, remained on its Achilles heel causing widespread crisis.IMF's First Deputy Managing Director Gita Gopinath said in May that achieving high-quality growth, the buzzword of President Xi Jinping, will require structural reforms to counter headwinds and address underlying imbalances. "Key priorities include rebalancing the economy towards consumption by strengthening the social safety net and liberalising the services sector to enable it to boost growth potential and create jobs," she said. She also highlighted China's role in restructuring the debt owed by several smaller countries. "The Fund looks forward to continued cooperation with the authorities in this regard," she said.Steve Barnett, the IMF's senior resident representative in China, said the third plenum should look to continue with economic reforms to boost productivity as it rolls out plans for the next decade. "If we think of the third plenum as a time to look at medium- and long-term reforms, if I could pick just one [pressing issue to focus on], it's to boost productivity," Barnett said. "The way to do that is to continue with economic reforms."And this takes us to things like giving the market a decisive role in the economy - which actually featured prominently for the first time in the 2013 third party plenum - and levelling the playing field between all types of firms - state-owned firms, private firms, foreign firms," he said.
