China's growth may slow to 4% this year, but its supply chains are intact: Experts

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Wang said China's supply chains are still robust and despite intermittent COVID-related work stoppages, port activity in China has returned to pre-April levels, especially in the Shanghai ports. She doesn't anticipate COVID-19 controls to impact exports out of China. Indeed exports have beaten estimates, she said. However, domestic production and productivity have declined she said, adding that she expects the overall economy to deliver a 4 percent growth this year.

Cavender was more bearish, "We will see some improvement in the back half of the year, but my concern is that it is not going to be quite as strong as maybe a lot of traders or investors might be looking to see. The government is going to take steps to try and increase spending on infrastructure projects and construction and that should help to some extent, but I think overall, we are talking about a fairly weak consumer market."

"It's totally unrealistic to think that we are going to see anything like the 5.5 percent that was originally forecast, I think we would be happy getting out of this year, seeing total growth for the year at anywhere above 3 percent," he added.

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Cavender pointed out that it's not realistic to expect China to continue to deliver a 7 percent growth given the base has grown huge. But he said the world won't be able to do without China and it will continue to account for over 40 percent of the world's commodities like refined metals. He also pointed out that, unlike other large economies, China's central bank has the leeway to drop rates and loosen the monetary policy. Others have argued that it is tough for the PBOC to be dovish and cut rates as the series of rate hikes in the US will mean capital will rush out of China.

Both economists see two immediate problems: one is the intermitted harsh lockdowns that create uncertainty and two is the deep slump in the property sector.

"China's demand for input of the commodity will probably stay relatively weak compared to what happened to China last year and the main reason for that is the economic slowdown, of course, but the most important reason is the weakness in the property market," Wang said. "It has been the biggest hole for China's growth in the first half of the year. And we don't anticipate it to recover much in the second half," she added.

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Recently, many homebuyers have protested publicly and refused to pay their mortgages on yet-to-be delivered homes. Cavender said the unwillingness to pay mortgages points to a larger problem. Many developers in China don’t have the funds to finish pre-sold projects, after the government, since mid-2021 has forced realty companies to pare down debt. The Chinese government has tried to appease consumers, said Cavender by forcing local bodies and banks to provide loans to real estate companies with high retain exposure.

Wang said she doesn't expect the property market to revive in the second half and that was the reason for her GDP downgrade to 4 percent this year. But she said loan defaults in the Chinese home loan market are only 1 percent, hence the protests won't precipitate an already tough situation.