China’s GDP growth rate for the second quarter was both lower than expected and the previous quarter. In addition, the performance of the China Fund has been significantly worse over the past year. Is China heading towards a recession?

Source code:

library(tidyverse)
library(tidyquant)
library(timetk)
library(ggthemes)

#The China Fund, Inc. (quarterly) (YoY)
df_china_fund <- 
  tq_get("CHN") %>% 
  tq_transmute(select = close,
               mutate_fun = to.quarterly,
               col_rename = "chn") %>%
  #YoY returns
  mutate(chn = (chn / lag(chn, 4) - 1) %>% round(2)) %>% 
  select(date, chn) %>% 
  drop_na()


#China Gross Domestic Product (GDP) YoY
df_gdp_chn <- read_csv("https://raw.githubusercontent.com/mesdi/investingcom/main/china_gdp_yoy.csv")

#Tidy GDP data
df_gdp_tidy <- 
  df_gdp_chn %>% 
  janitor::clean_names() %>% 
  select(date = release_date, gdp = actual) %>% 
  mutate(date = #removing parentheses and the text within
           case_when(str_detect(date," \\(.*\\)") ~ str_remove(date," \\(.*\\)"), 
                     TRUE ~ date)) %>% 
  mutate(date = parse_date(date, format = "%b %d, %Y") %>% 
           #subtract a quarter from the date
           floor_date("quarter") %m-% months(3) %>% 
           as.yearqtr(.),
         gdp = str_remove(gdp, "%") %>% as.numeric() / 100)


#Merging all the data sets
df_merged <- 
  df_gdp_tidy %>% 
  left_join(df_china_fund) %>% 
  drop_na()


#Plot
df_merged %>% 
  filter(date >= 2023) %>% 
  ggplot(aes(date)) + 
  geom_line(aes(y = gdp), 
            size =1.5,
            color = "darkorange") +
  geom_area(aes(y = gdp), 
            fill = "darkorange", 
            alpha = 0.7) +
  geom_point(aes(y = gdp), 
             size = 3,
             color = "darkorange") +
  geom_bar(aes(y = chn), 
           stat = "identity",
           fill = "steelblue",
           alpha = 0.7) +
  scale_y_continuous(labels = scales::percent, 
                     limits = c(-0.30,0.10)) +
  scale_x_yearqtr(format = "%Y Q%q" , n = 6) +
  labs(x="", y ="",
       title = "China's Economic Performance",
       subtitle = "<span style = 'color:darkorange;'>China Gross Domestic Product (GDP)</span> <br> <span style = 'color:steelblue;'>The China Fund, Inc</span> <br> (Quarterly) (YoY)") +
  theme_wsj(base_family = "Bricolage Grotesque") +
  theme(plot.subtitle = ggtext::element_markdown(size = 12, face = "bold"))