The Chinese economy contracted sharply in the second quarter of the year, highlighting the massive losses to activity, due to the widespread shutdowns to combat COVID-19, and pointing to continued pressures in the coming months amid a bleak outlook for global growth.
Friday’s data comes at a time of fears of a global recession; Monetary policy makers are raising interest rates to curb spiraling inflation, which is causing more hardships for consumers and businesses around the world as they face challenges from the Ukraine war and supply chain disruptions.
Official data showed that the gross domestic product declined by 2.6% in the second quarter compared to the previous quarter, once morest expectations of a 1.5% decrease and an increase of 1.4% in the previous quarter.
On an annual basis, gross domestic product in the April-June quarter grew by 0.4 percent, missing expectations for a 1.0 percent increase according to a Archyde.com poll of analysts, and a sharp slowdown from 4.8 percent in the first quarter.
In the first half of the year, GDP grew by 2.5 percent, well below the government’s target of 5.5 percent for this year.
China imposed full or partial closures in major centers across the country in March and April, including the commercial capital Shanghai, which saw an annual contraction of 13.7 percent in gross domestic product in the last quarter.
Despite the lifting of many of these restrictions since then and signs of improvement in the June data, analysts do not expect a rapid economic recovery.
Activity data for June, released on Friday, also showed that Chinese industrial production grew by 3.9 percent in June on an annual basis, compared with 0.7 percent in May, albeit less than expectations for a 4.1 percent increase in a Archyde.com poll.
Retail sales rose 3.1 percent on an annual basis in June and recorded the fastest growth in four months following authorities lifted a two-month lockdown in Shanghai. Analysts had expected a 0 percent increase following a 6.7 percent decline in May.
(Archyde.com)
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chinese economy
China Stock Market: Shanghai Composite closed up 37.37 points | RYT9
written by Alexandra Hartman Editor-in-Chief
The Shanghai Composite Index, China’s stock markets closed higher today. Responding to news, Shanghai announced the end of lockdown measures from June 1 onwards. This gives investors confidence that the decision will help China’s economy recover.
The Shanghai Composite Index closed at 3,186.43, up 37.37, or +1.19%.
Song Ming, deputy mayor of Shanghai, said on Wednesday (May 31) that Shanghai will allow department stores and shops to resume normal operations. including allowing people in low-risk areas to return to work
In addition, Shanghai will allow trains to resume normal service. and will increase the number of domestic flights including adjusting the passenger transport rate (Load Factor) as well
Ms Song’s statement came following the Shanghai municipal government said yesterday that Shanghai will lift the lockdown from Wednesday, June 1, with announcing measures to revitalize the economy and help businesses affected by the lockdown to contain the spread of the coronavirus. The measure includes tax and fee breaks for businesses affected by the lockdown.
Oil prices rise amid optimism about increased demand from China
written by Alexandra Hartman Editor-in-Chief
LONDON (Archyde.com) – Oil prices rose on Monday on optimism that Chinese demand will increase following positive signs that the coronavirus pandemic is easing in the hardest-hit areas. Brent crude futures rose $1.34, or 1.2 percent, to $112.89 a barrel at 1342 GMT, while US West Texas Intermediate crude futures rose $2.2, or less than 0.1 percent, to $112.71 a barrel. On Monday, an official in Shanghai said that the city aims to reopen widely and allow the normal life of its 25 million residents to resume from June 1, following infections subsided. However, it is estimated that 46 cities in China are under lockdown, affecting shopping, factory production and energy use. Meanwhile, US gasoline futures hit an all-time high on Monday, as falling inventories fueled supply fears. Oil prices also found some support when diplomats and European Union officials expressed optimism regarding reaching an agreement on a phased ban on Russian oil despite concerns regarding supplies in Eastern Europe.
Corona closures accelerate the contraction of factory activity in China
written by Alexandra Hartman Editor-in-Chief
Factory activity in China contracted more sharply in April, as widespread closures imposed to combat “Covid-19” halted industrial production and disrupted supply chains, raising fears of a sharp economic slowdown in the second quarter that will affect global growth. .
The National Bureau of Statistics said Saturday that the official Purchasing Managers’ Index for the manufacturing sector fell to 47.4 points in April from 49.5 in March, contraction for the second month in a row. This is the lowest level since February 2020.
A Archyde.com poll had expected the Purchasing Managers’ Index to fall to 48 points, well below the 50-point mark that separates contraction from growth on a monthly basis.
The PMI reading, along with a sharper decline in services, provides the first indications of the performance of an economy wracked by the expansion of anti-Covid-19 restrictions, such as the extended shutdown of the Shanghai mall. It is believed that dozens of major Chinese cities are in full or partial lockdown due to the strict anti-coronavirus policy.
With hundreds of millions stuck at home, consumption is taking a hit, prompting more analysts to cut growth forecasts for the world’s second-largest economy.
The production sub-index fell to 44.4 points in April from 49.5 the previous month, while new orders fell to 42.6 from 48.8 in March. (Archyde.com)