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China’s major economic indicators fell deeply in April, the decline narrowed in May, and stabilized and rebounded in June.
On July 15, China’s National Bureau of Statistics released data showing that in the second quarter of 2022, GDP (gross domestic product) increased by only 0.4% year-on-year.
In contrast, the economy grew by 4.8% in the first quarter of this year, and dropped significantly in the second quarter. At the same time, it dragged down the overall economic growth in the first half of the year. The first six months recorded only a total growth of 2.5%, while China’s annual economic growth target is 5.5%.
As China’s most important economic center, Shanghai was under lockdown for most of the second quarter, so the market generally expected growth to slow sharply, but still more than expected.
Before the data was released, Caixin, Archyde.com and other media conducted surveys of domestic and foreign institutions and economists, and the market expected that the economic growth in the second quarter would be around 0.8%-1%. The 0.4% increase that was finally announced was below market expectations.
The growth of agriculture and industry both slowed down, among which agriculture was less affected, only 1.6 percentage points lower than the previous quarter, and industry dropped sharply by 4.9 percentage points, with an increase of only 0.9%.
The hardest hit was the service sector, which fell into contraction territory from 4% growth in the first quarter, down 0.4% year-on-year.
The deepest decline occurred in April’s consumption data, with total retail sales of consumer goods down 11.1% year-on-year.
However, officials from China’s statistics department are also emphasizing that the economy has begun to recover, as the main economic data has begun to pick up in June –
For example, the surveyed unemployment rate of the 25-59-year-old population, the main working-age group, was 4.5 percent in June, down 0.6 percentage points from May.
For another example, in June, the added value of industries above designated size increased by 3.9% year-on-year, 3.2 percentage points faster than the previous month.
image source,REUTERS
The sudden stop of all industries in Shanghai during the epidemic requires centralized deployment of materials to meet the needs of citizens.
“In the second quarter, the economy withstood pressure and achieved positive growth,” said Fu Linghui, a spokesman for China’s National Bureau of Statistics. The epidemic has spread frequently, and the adverse impact has increased significantly. The economic development is extremely unusual, and unexpected unexpected factors have brought a serious impact. The main economic indicators fell deeply in April, the decline narrowed in May, and stabilized and rebounded in June.
It is worth noting that the economic conditions faced by China and the United States are very different. The price increase in China is limited. The CPI rose by 1.7% year-on-year in the first half of the year, and the second quarter rose by 2.3% year-on-year. The United States is deeply troubled by high prices and has to raise interest rates to stabilize prices.
China saw a decline in consumption, down 0.7% year-on-year in the first half of the year, including a 4.6% year-on-year decline in the second quarter. Stimulus policies are urgently needed to boost demand.
Previously, China’s stimulus policies still showed some effects. For example, China’s automobile production and sales in June completed 2.499 million and 2.502 million respectively, a year-on-year increase of 28.2% and 23.8%, significantly exceeding market expectations.