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China’s pace of economic recovery rose modestly in the second quarter after signs of a slowdown in the world’s second-largest economy raised expectations of higher policy support.
On a quarterly basis, China’s gross domestic product rose 1.3% in the three months to the end of June, compared to a 0.4% expansion in the previous quarter, the National Bureau of Foreign Affairs said on Thursday ‘Statistics. Economists had forecast quarter-on-quarter growth of 1 to 1.2%, according to Bloomberg and Reuters polls.
GDP in the second quarter was 7.9% higher than the previous year, compared to year-on-year growth of 18.3 percent in the first quarter. The high growth of the first quarter reflected an almost complete halt in economic activity in early 2020 following the eruption of the Covid-19 pandemic in central China and forced the government to impose a national closure.
NBS data release reaches tense conjuncture for China’s economic planners trying to balance financial stability with growth.
Niu spokesman Liu Aihua told reporters in Beijing that the economy had continued to “steadily recover,” but warned of the outlook and said the recovery was “unbalanced.”
“We must also be aware that coronavirus continues to mutate globally and that external instabilities and uncertainties abound,” he said.
Signs of downward pressure on China’s recovery have sparked speculation that Beijing will unleash more political support to boost business confidence and employment and raise spending.
But any such easing threatens to wane policies presented at reduce leverage and deal with a number of default values at the end of last year. These problems are especially acute among state-owned enterprises in the central and northern provinces, causing concerns about the instability of the financial system.
China, the first major economy to emerge from a blockade last year, has been closely monitored by other economies struggling with fragile recoveries and the effects of the crisis.
The country’s exports for much of this year have exceeded market expectations, driven by the United States and parts of Europe that have eased social distancing measures and returned to growth. But the The rapid spread of the Covid-19 Delta variant has questioned external demand during the second half of the year.
Manufacturers all over Asia have also been blinded by things strong price increases i sudden supply restrictions hitting significant industrial inputs. There are also delays in shipping and lack of raw materials fears caused by interruptions.
However, according to the SNB, China’s industrial production grew by 8.9% compared to the same period last year.
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Investment in fixed assets, which tracks spending in crucial areas such as infrastructure and property, rose 12.6% year-on-year during the first half of 2021.
Mixed sentiment about China’s domestic consumption has also raised some concerns about the health of the services sector.
Retail sales rose 12.1% in June. This compared to 12.4% in May and 17.7% in April, according to NBS data, which highlighted continued pressure on domestic consumer spending and uneven economic recovery. .
The urban unemployment rate was 5 percent, according to NBS, up from 5.3 percent at the end of the first quarter. The unemployment rate for 16- to 24-year-olds rose from 15.6% to 15.4%, from 13.6%, underscoring another key challenge for Beijing.
Additional reports from Xinning Liu in Beijing and Hudson Lockett in Hong Kong
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