China on track for growth target, and other economics stories to read this week

China is on track to achieve its growth target of 5% in 2024. That was the message from leaders at the World Economic Forum's Annual Meeting of the New Champions (AMNC) in Dalian.

Premier Li Qiang said the Chinese economy had sustained "the momentum of recovery" since the start of the year.

"It got off to a good start in the first quarter with a 5.3% year-on-year growth, and continued steady growth in the second quarter. We have the confidence and capability to achieve the growth target of around 5% for this year."

The Premier's speech was marked by optimism around the potential for growth, as he outlined "a host of sectors" – from AI to biomedicine – expected to "evolve into multi-trillion-dollar pillar industries".

China's growth is good news for the global economy. In 2023, China accounted for around 30% of global growth, Peng Sen, President of the China Society of Economic Reform, told the AMNC's China Economic Outlook session.

"In general terms, China's economy is on the upswing, but that's not to say it's without its problems. The process of recovery doesn't yet have very firm foundations.

"As China's growth stabilizes, this is good news for the world. [Chinese Premier] Li Qiang at the opening of this meeting, announced this goal that [the economy] would grow by 5.0%. And I'm fully confident that China will achieve that."

Manufacturing activity was uneven across the globe in June, according to data.

In the Eurozone, factory activity declined last month, with Italy the only major European player that did not experience a decline in its Purchasing Managers' Index (PMI).

The final manufacturing PMI for the Eurozone dropped to 45.8 in June from May's 47.3, the HCOB Eurozone Manufacturing PMI showed, a measure of the overall health of eurozone factories compiled by S&P Global.

Meanwhile, Asia's factory activity grew in June due to strong global economic momentum and improving semiconductor output prospects.

India's manufacturing sector experienced a rebound in activity. Output increased due to strong demand, resulting in the quickest rate of hiring in over 19 years.

"What looks like the green shoots of recovery seem to be diminishing. We can't take a recovery for granted," George Moran at Nomura told Reuters.

Official data shows Argentina entered a technical recession in the first quarter of the year. The country's gross domestic product (GDP) decreased by 2.6% in the first quarter of the year compared to the final quarter of 2023, marking the second consecutive quarter of contraction, meeting the definition of a recession.

First-quarter GDP in Japan was downgraded and service-sector business sentiment declined in June due to concerns about increasing costs.

US monthly inflation remained unchanged in May. The cost of services increased slightly, but was offset by the largest drop in goods prices in six months. This brings the Federal Reserve closer to considering interest rate cuts later this year.

Sales of new US single-family homes dropped to a six-month low in May due to higher mortgage rates affecting demand. The Commerce Department's report showed the largest decline in sales in more than 18 months.

Revised official data shows Britain's economy exited recession faster than expected in the first three months of the year. The Office for National Statistics reported a 0.7% GDP growth, higher than the initial 0.6% estimate.

Consumer inflation in Australia reached a six-month high in May. Core prices rose for a fourth consecutive month, surprising traders and leading markets to increase the likelihood of another interest rate hike this year.

Innovation and international collaboration are crucial in addressing global challenges but uneven levels of innovation across regions can hinder global development and economic growth, writes Liming Chen, Chair of Greater China; Member of the Executive Committee, World Economic Forum. China has emerged as a major driver of global innovation, significantly increasing its research and development expenditure and leading in patent applications. Here's what you need to know.

Harnessing the power of innovation to fuel 'intelligent economies' is necessary to avoid the decade becoming the 'Tepid Twenties', writes Mirek Dušek, Managing Director, World Economic Forum. Sovereignty and security regarding technology must be balanced with openness and interoperability. Intelligent economies should serve people and the planet, beginning with a fully realized energy transition.

China's Belt and Road Initiative is bolstering economies from East Asia to Europe, with a focus on the Middle East and GCC countries. Chinese technology and investment are helping strengthen economic ties and attracting investors, says Duncan Zheng, Senior Managing Director, Investcorp International.