Chinese Economy Gets A Blow
Communist China’s economy narrowly escaped a contraction in the second quarter as the fallout from leader Xi Jinping’s economic policies.
July sales were down 28.6 per cent from June, ending a two-month recovery in month-to-month sales growth. Apartment sales showed increases in May and June from the previous months as activity picked up following long Covid-19 lockdowns in Shanghai and other Chinese cities this year.
The results in manufacturing and real estate, itself accounting for one-third of China’s economy by some estimates, underscored how far the country remains from any semblance of postpandemic normalcy.
The economy expanded 0.4 per cent year on year in the three months to the end of June, below the 1.2 per cent forecast by economists, and down from the 4.8 per cent recorded in the first quarter.
The National Bureau of Statistics figures were released at a tense juncture for Xi’s economic planners.
The 0.4 per cent result marked China’s second-worst quarterly growth figure in 30 years, following a contraction at the start of the pandemic.
With first-half growth at 2.5 per cent, Beijing is expected to miss its target of about 5.5 per cent annual growth for 2022, itself a three-decade low.
These data highlight the unfavourable domestic and external circumstances that are squeezing economic activity and emphasise the dire need for short-term policy measures to revive growth, said Eswar Prasad, economics professor at Cornell University and former head of the IMF’s China division.