China’s economic growth has slowed in the second quarter, according to official data released by the government on Monday. The country’s GDP grew 6.9% in the second quarter of 2018, down from a year-over-year growth rate of 7% in Q1.
China’s economic growth slowed in the second quarter of 2020. The country’s GDP grew by 6.2% in the second quarter, which is lower than the 6.7% growth recorded in the first quarter of 2020. Read more in detail here: china economic growth 2020.
BEIJING— China’s economic recovery slowed in the second quarter, but the country’s resilience remained unusually strong more than a year after the coronavirus was mostly contained inside its borders.
China’s factories produced more than anticipated in the third quarter, while its consumers outperformed forecasts, boosting optimism that domestic spending would play a bigger role in maintaining momentum in the coming months.
Overall, China’s government said on Thursday that the country’s gross domestic product increased 7.9% year over year in the second quarter, which was in line with analysts’ forecasts.
While that rate of growth was much slower than the 18.3% year-over-year GDP increase seen in the first three months of 2021, no one anticipated China’s economy to maintain that pace as the statistical distortions caused by last year’s pandemic crisis receded.
In comparison to the pandemic-ravaged first half of 2020, the second-quarter growth number helped propel China’s economy to a 12.7 percent increase for the first half of the year.
Stronger-than-expected readings on industrial production, retail sales, and fixed-asset investment statistics in June are likely to calm growing speculation that Beijing would intervene more aggressively in the second half of the year to maintain its economic momentum.
Beijing decided to free up more cash in the banking sector for lending last week, surprising many in the market and hinting at high-level worries over slowing economic growth.
However, further stimulation may not be required. Policymakers now seem to have plenty of room to meet their full-year growth goal of at least 6%, even if the economy slows significantly in the second half, thanks to the 12.7 percent first-half growth number.
Given the many uncertainties surrounding the coronavirus epidemic and the global recovery, Beijing has been cautious in controlling economic expectations this year.
Earlier this year, a guy works on a building site in Shanghai.
Photo credit: Shutterstock/Alex Plavevski
Economists saw China’s Premier Li Keqiang’s growth goal of 6% or higher, announced in March, as cautious. Given the low base of comparison from 2020, many analysts anticipate China to easily achieve 8% growth or more this year.
Beijing has also indicated that it would be OK with slower growth this year while it continues longer-term attempts to address underlying economic imbalances, including as growing debt levels, soaring housing prices, and an aging population, which were halted by the epidemic.
Now, Beijing’s surprising second-quarter resilience may enable it to maintain reasonably rapid growth while while addressing these longer-term problems.
Economic strength was evident across the board. According to statistics published by the National Bureau of Statistics on Thursday, industrial production increased 8.9% in the second quarter and 8.3% in June compared to a year ago, above forecasts.
Retail sales, a crucial indicator of Chinese consumer spending, rose 13.9 percent in the second quarter and 12.1 percent in June, both above expectations.
Fixed-asset investment increased by 12.6 percent in the first half of the year, surpassing forecasts once again.
China’s headline unemployment rate, the urban surveyed unemployment rate, remained at 5.0 percent in June, the same as in May, according to the statistics office.
The results were published on Thursday after data earlier in the week showed that exports, a workhorse of the recovery that has so far produced month after month of outperformance, posted another another better-than-expected result in June.
Despite increasing geopolitical tensions, the solid figures highlight the attractiveness of China’s market for American businesses.
The American bluejeans company Levi Strauss & Co. announced a better-than-expected quarter in the three months ended May 30, due in part to sales in China that exceeded pre-coronavirus levels.
According to Charles Bergh, president and CEO of Levi Strauss, quarterly sales in China increased 3% over the same time last year as the business moved more of its sales to online channels, which he described as “one of our biggest development possibilities.”
Earlier this year, at a Beijing shopping center, people pass an electric car.
Reuters photo by tingshu wang
Northern Technologies International Co., a manufacturer of biodegradable plastics and corrosion-resistant products, said that net sales at its China subsidiary increased 30.7 percent from the previous quarter to a new high in the most recent quarter, which ended May 30.
Earlier this month, Chief Executive Patrick Lynch said, “We anticipate China will likely become our biggest regional market in the next year.”
This month, the Circle Pines, Minn.-based business will spend $6.2 million in a new Shanghai facility to support its China operations.
Not everyone benefits equally. Sherry Cai, sales manager of Guangzhou C&Y Filter Co., a small filter maker in China’s southern Guangdong province with two manufacturing lines, says rising raw material costs have wiped out the company’s profits this year, despite constant client demand.
“The greatest issue we have this year is the rise in raw material costs,” Ms. Cai said, adding that prices for imported filter paper from South Korea increased by almost 30% in the first half of the year.
A scarcity of shipping containers and a stronger yuan made the company’s goods less competitive on the worldwide market, in addition to rising raw material costs.
“On our goods, the profit margin is just 10%. If the cost has risen by 30%, we won’t be able to pass the whole increase on to our customers,” Ms. Cai says. “We’ll have to pay the price.”
—This essay was co-written by Grace Zhu and Bingyan Wang.
Jonathan Cheng can be reached at [email protected].
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The China’s Economic Growth Slows in the Second Quarter is a recent article that discusses China’s economic outlook for 2021. Reference: china economic outlook 2021.
Frequently Asked Questions
Is China economic growth slowing down?
Chinas economy is growing at a rate of 6.8% per year, which is still higher than the world average. However, it has been slowing down since 2014 due to a number of factors including a slowdown in domestic demand and an increase in debt from stimulus packages.
What was GDP growth in 2nd quarter 2020?
GDP growth in the second quarter of 2020 was 0.6%.
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