The worlds second-largest economy is all back on the growth track after it shrunk 6.8 per cent during the first three month of the year due to pandemic. Chinese economy avoided a recession by growing 3.2 per cent in the second quarter of 2020, making it the first major economy to return to growth from the damage caused by the coronavirus.
As per reports, China said that its economy grew by 3.2 per cent from a year earlier in the second quarter, as authorities were benefited from an aggressive campaign to wipe out the virus within its border.
The economic decline witnessed by China in the opening quarter of the year was the first contraction since the end of the Cultural Revolution in 1976. The median forecast of analysts polled by Bloomberg had predicted a Gross Domestic Product (GDP) growth rate of 2.4 per cent in the second quarter. However, figures released on July 9, shows that China’s GDP returned to growth from April to June and is 0.8 per cent more than the prediction.
Key point of National Bureau of Statistics:
According to the figures released by the National Bureau of Statistics (NBS), China’s industrial output increased by 4.4 per cent year-on-year in May, its second hike in 2020 after posting a growth of 3.9 per cent in April. The industrial production, a gauge of manufacturing, mining and utilities, further showed a rise by 4.8 per cent in June.
Industrial production had plunged 13.5 per cent year-on-year in the first two months of the year and declined by 1.1 per cent in March before bouncing back to 3.9 per cent in April.
The manufacturing grew by 5.2 per cent year-on-year in May against the 5 per cent growth of April while mining rose by 1.1 per cent in May from the 0.3 per cent increase in the previous month.
The NBS also released data on other indicators on Monday, including retail sales, a crucial measurement of consumption and one of the pillars of the change in the economic model proposed by Beijing.
Retail sales, fell by 1.8 per cent, better than the of 2.8 per cent in May, an improvement after the higher declines showed in April (-7.5 per cent) and March (-15.8 per cent).
According to NBS, fixed-asset investment in the first five months of 2020 decreased by 6.3 per cent as compared to the 10.3 per cent decline in the indicator between January and April.
Meanwhile, the surveyed jobless rate in urban areas stood at 5.7 per cent in June, a decline when compared to 5.9 per cent in May and the recent peak of 6.2 per cent in February.
China’s government has set a target of creating 9 million new urban jobs in 2020, compared to 11 million last year, and maintaining a surveyed urban unemployment rate of around 6 per cent, compared to 5.5 per cent last year. In 2019, China created 13.52 million new urban jobs.
Furthermore, NBS added that the data released on Monday indicated a positive Chinese economy and showed that demand was continuing to rise and that the national economy was gradually recovering.
However, the agency warned that the stable improvement of the Chinese economy still faces many risks and difficulties as the epidemic situation across the globe remained severe.
NBS spokeswoman Liu Aihua said that through most of the economic indicators such as industrial output, service sector, investment or retail sales were in the negative territory; the rebound can be judged as a restorative growth.
According to Mei Xinyu, a researcher with the Ministry of Commerce, said that China’s economic output has “definitely” exceeded the United States in the second quarter, given the downturn in the American economy.
He further added that “China’s whole-year GDP in 2020 could be slightly lower than that of the US, but if the chaos in America continues to escalate, Beijing whole-year GDP could exceed that of US this year.”
Amid other major economies like the US, European countries, Japan are all struggling to withstand the downfall; the Chinese economy showed significant progress by the second quarter of the year itself.