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· The faster growth of the Chinese economy than what was expected belied several forecasts that the impact of the pandemic would be there with the world’s second largest economy
· China’s gross domestic product expanded 3.2% in the three months to June as compared to the same period last year
· That reversed a 6.8% decline in the first quarter and also outpaced the forecast of 2.4%. Still, the economy is 1.6% smaller than at the end of the first half in 2019
The Chinese economy seems to have returned to growth path in the second quarter, snapping bonds with the slump brought about by the coronavirus. The faster growth of the Chinese economy than what was expected belied several forecasts that the impact of the pandemic would be there with the world’s second largest economy.
China’s gross domestic product expanded 3.2% in the three months to June as compared to the same period last year. That reversed a 6.8% decline in the first quarter and also outpaced the forecast of 2.4%. Still, the economy is 1.6% smaller than at the end of the first half in 2019.
China is claiming success in dealing with the impact of the deadly disease after almost closing the economy for three months at a stretch. However, the shutdowns in the rest of the world and sluggish global demand may affect further growth of the Chinese economy, which has an expansive international trade.
Chinese Industrial output rose 4.8% from a year earlier. However, retail sales shrank 1.8%, weaker than a projected 0.5% increase. Fixed-asset investment declined by 3.1% in the first half of the year, as against the forecast decline of 3.3%. In the first half of the year, industrial output fell by 1.3%, while retail sales shrank by 11.4%. The surveyed urban jobless rate fell to 5.7%
The recovery “was driven by credit stimulus as evident in the strong infrastructure and property investment, while the recovery in retail sales and private investment has continued to lag, Data showed the recovery is still largely industry-driven, while consumer spending was weaker than expected. A raft of measures have been rolled out since the pandemic to shore up the economy, including tax and fee cuts, cheaper loans, and increased fiscal spending. Stimulus has still fallen far short of the policies offered in developed economies, out of concern for debt buildup and financial stability.
