Amid the global uncertainty due to the coronavirus pandemic, the Chinese economy has moderated its recovery during the second quarter. According to the data announced this Thursday by the National Bureau of Statistics, its Gross Domestic Product (GDP) grew by 7.9% year-on-year between April and June,
well below the record rebound of 18.3% recorded in the first quarter. With this figure, it more than compensated for the historical drop of 6.8% that China suffered in the first quarter of last year due to the outbreak of the coronavirus in Wuhan, which forced to close the city and its province of Hubei for 76 days and paralyzed the country for almost two months. Finally, its draconian measures worked and, while the rest of the large economies suffered sharp falls due to the impact of the Covid-19 disease, China closed the previous year with an enviable growth of 2.3%.
After the rebound due to the control of the epidemic, which materialized in a notable year-on-year growth of 12.7% during the first semester, the Chinese economy seems to lose a bit of steam due to the fears that the coronavirus still generates throughout the planet. During the second quarter, growth was significantly lower than what Bloomberg analysts expected. Compared to the first quarter, the increase was 1.3%, 0.9 percentage points more than the 0.4% increase achieved in that period.
Despite tempering, everything indicates that, if a catastrophe does not occur, China’s GDP will more than meet its goal of growing “around 6%”, set by the authorities. In fact, experts agree that it could exceed 8% at the end of the year.
“In general terms, the national economy has experienced a sustained recovery in the first half of the year with the rebound in production and demand, the stability of employment and prices and new forces improving market expectations,” he congratulated in a the National Bureau of Statistics reported, according to the state news agency Xinhua. But he also warns that “the pandemic continues to mutate globally and external instability and uncertainties abound.”
Breaking down Chinese GDP, industrial production rose 8.3% year-on-year in June, half a point less than the increase achieved in May but above the 7.9% forecast by the Bloomberg agency. Compared to the same period in 2020, industrial production rose 15.9% during the first half and 8.9% in the second quarter, according to the “South China Morning Post” newspaper.
Retail sales, another key figure because it indicates the degree of consumer confidence, also grew by 12.1% in June, three tenths less than in May but also above the expectations of 10.8% calculated by the Bloomberg analysts. Compared to the first half of last year, the recovery in retail sales was 23 percent through June, with a 13.9% rise in the second quarter.
Similarly, investment in fixed assets, which includes spending on infrastructure, property, machinery and equipment, rose 12.6% year-on-year between January and June. In this field, Bloomberg experts did expect a greater recovery, of up to 16%, because the rise until May had been 17.8%.
Although this variable is not representative of reality because it does not include millions of rural emigrants, officially unemployment stood at the usual 5% in both June and May. As is tradition, the authorities have set themselves the goal of creating eleven million new urban jobs and maintaining unemployment at around 5.5%.
With these figures, China confirms its recovery, tempered after the rebound in the first quarter, and faces a second half of the year that will be marked by the course of the pandemic and global economic instability. Experts fear that the world’s second largest economy will be damaged by the high price of raw materials, such as iron and copper, and the delays and disruptions that global supply chains are experiencing. As happened in China last year, everything will depend on how long it takes for other countries to control the coronavirus.