China's Economic Balancing Act Amidst Global Tensions

China's economic landscape appears to be cooling after a robust start to the year, overshadowed by escalating trade tensions and a sustained property market downturn. The slowdown is prompting policymakers to consider introducing additional stimulus measures to bolster growth.

Despite a temporary respite from the U.S.-China trade truce and policy assistance, forecasts predict a weaker economic performance in the latter half of the year, influenced by dwindling exports, decreasing prices, and low consumer confidence. The anticipated GDP growth rate is expected to fall to 5.1% in Q2, from 5.4% in Q1, surpassing April's forecast yet aligning with the national target of around 5%.

Financial experts from Morgan Stanley noted an anticipated reduction in growth during the third and fourth quarters, potentially jeopardizing the annual growth target. Beijing may unveil a significant supplementary budget, alongside measures to stimulate domestic demand and address deflationary pressures. Analysts are keeping a close eye on potential policy changes at upcoming political meetings.

(With inputs from agencies.)