CHINA: China, the world’s second-biggest economy, found its growth rate contracting sharply in the second quarter of this year as nationwide coronavirus restrictions adversely hit businesses and consumers.
Gross Domestic Product (GDP) plummeted to 2.6% in the three months to the end of June from the first quarter.
According to figures issued by China’s National Bureau of Statistics, the economy expanded by 0.4% annually in the April-June quarter, falling short of the 1% growth target.
“Second quarter GDP growth was the worst outcome since the start of the pandemic, as lockdowns, notably in Shanghai, severely impacted activity at the start of the quarter,” Tommy Wu, lead economist at Oxford Economics, told BBC.
The data comes as the nation continues to impose its “zero-covid” policy. Major cities across China, including the major commercial, financial and manufacturing hub of Shanghai, were put under full or partial lockdowns last month.
After many of these restrictions were lifted, the positive outcomes showed up in official figures for last month. Mr Wu added, “However, June data was more positive, with activity picking up after most of the lockdowns were lifted. But the real estate downturn continued to drag on growth.”
Some economists and analysts noted that there were possible positive changes in today’s economic data from China. One of them, Jeff Halley, senior market analyst for the Asia Pacific at a trading platform, Oanda said that “GDP was worse than expected, however unemployment fell to 3.5%, and retail marketing outperformed impressively.”
Meanwhile, other analysts continue to raise doubts over China’s quick recovery as the government continues to impose its stringent zero-Covid approach to slow down the virus, in effect halting many profitable businesses and sectors.
It is reported that China will also miss the target of 5.5% economic growth by this year’s end. If that occurs, it will only witness investors and businessmen boycott their deals, in turn further breaking down the economy and heaping more pressure on President Xi Jinping to lift the bans.