China admits that its economy is facing a 'very serious and complex' situation

In an unusual public acknowledgment, China's Minister of Commerce Wang Wentao warned that the country's economy is facing "a very serious and complex situation", marked by global disruptions, weakened domestic consumption, and the ongoing trade war with the United States.

China's GDP grew 5.2% in the second quarter of the year, according to official data released on Tuesday. However, analysts warn about a possible slowdown in the coming months if additional measures aren't implemented to stimulate demand and sustain the growth rate.

An unstable global context and internal challenges

During a press conference, Wang highlighted the uncertainty caused by changes in global trade, especially after the tightening of tariffs by the United States. According to the official: "We still face a very serious and complex situation. Global changes are unstable and uncertain. Some of our policies will provide new responses in line with the times and circumstances."

He also stated that the regime has a "full toolbox" and is prepared to adopt new economic policies in the second half of the year.

Consumption under the scrutiny of Chinese authorities

Amid the decline in domestic consumption, Xi Jinping's government is considering new stimulus measures to strengthen the domestic market. Wang emphasized that:

• The Chinese market retains "great potential and vitality."
• New consumption trends, such as the global Labubu phenomenon, show emerging opportunities.
• New forms of consumption are being promoted, such as collectibles and popular cultural products.

The Labubu phenomenon, linked to the toy brand Pop Mart, was mentioned by the minister as an example of how Chinese consumer culture can project itself globally.

Tensions with the United States: no rupture, but with impacts

Regarding the bilateral relationship with Washington, Wang stressed that, despite tariff clashes, China isn't seeking an economic rupture with the U.S.:

• He stated that economic ties are structural and can't be artificially broken.
• He acknowledged that tensions have damaged normal trade cooperation between both countries.
• He reiterated that the United States remains a key partner for China, beyond "the storm."

The communist regime seeks to preserve its supply chains and insists that trade decoupling with the U.S. would be detrimental to both parties.