What's going on?

Data out on Friday showed that China�s economy posted its second-worst quarterly growth in 30 years.

What does this mean?

We�ve had our whole team of analysts working on this head-scratcher all day, and they�ve come to a startling conclusion: it turns out that shuttering businesses and keeping your population locked in their homes isn�t productive for a country�s economy. No, really: China�s services sector � which accounts for over half its economy � shrank 0.4% from the same time last year, while its retail sales dropped 4.6%. It�s just a blessing that some Chinese factory workers basically lived on site, since manufacturing output managed to grow 0.7%. But hostage-taking only goes so far, and the country�s economy ultimately only grew by 0.4% last quarter � well below the 4.8% of the quarter before.

Why should I care?

Zooming in: Be ambitious, but be realistic.
We now know that China�s economy grew 2.5% in the first half of the year, making its government�s full-year target of 5.5% � already a 30-year low � look well out of reach. Its economy would now need to grow by around 8% for it to happen, even as the country stands by a zero-Covid policy that�s currently putting a quarter of its population under some form of restriction. That simply isn�t going to happen, says Goldman Sachs: the investment bank now thinks the country�s economy will grow just 3.3% this year.

The bigger picture: A true underdog story.
China is a huge buyer of everything from oil to corn, so this slowdown doesn�t bode well for a global economy already hit by recession concerns. But China isn�t going down without a fight: economists are expecting its government to introduce hundreds of billions of dollars worth of stimulus to boost growth for the rest of the year (tweet this).