China’s growth crosscurrents – What’s new?

China’s weak, 0.4% YoY, GDP growth in Q2 22 could be as bad as it gets because the intensity of policy easing to boost growth has been rising and, crucially, Beijing’s Zero-Covid policy has become more flexible to reduce its drag on the economy. However, growth headwinds have also increased due to the recent increase in mortgage delinquency, the impact of which is still uncertain. Any recovery looks set to be gradual at best, leaving 2022 growth short of the government’s 5.5% target, although the medium-term outlook is improving