Reference:CGTN | Updated:15 July 2020
China's economy returned to modest growth in the second quarter of 2020 and reverted from the first contraction on record in the first quarter this year, as COVID-19 eases and policymakers announced economic packages, official data showed Thursday.
The world's second-largest economy grew by 3.2 percent in April-June from a year earlier, reversing a 6.8-percent decline in the first quarter – the first contraction since at least 1992 when official quarterly gross domestic product (GDP) records started, according to China's National Bureau of Statistics. In the first half of 2020, China's economy declined by 1.6 percent year on year.
The reading beats the median 1.1 percent forecast by economists surveyed by Nikkei and coincides with an AFP poll which projected the economy would claw its way back into growth territory in the second quarter of this year, after the coronavirus pandemic handed the world's second largest economy its first contraction in decades. The poll also forecast that China will be the only major economy to experience positive growth this year.
"China's GDP growth rebounded rapidly in the second quarter, thanks to the successful epidemic control, orderly resumption of work and production, and supportive government policies," said Bai Ming, deputy director of the international market research institute of Chinese Academy of International Trade and Economic Cooperation.
The growth is unexpected as the world's economic growth between April and June is arguably the worst in the past few decades, according to Nomura Securities. The growth rates of developed economies such as the U.S. and countries in Europe are basically below negative 10 percent year on year.
"China's economy has staged an impressive comeback since mid-March, driven by pent-up demand, a catch-up in production, a surge in medical product exports and stimulus in both China and other major economies that has supported demand for goods made in China," said Lu Ting, chief China economist from Nomura.
In the first half, the country's added value of major industrial enterprises declined by 1.3 percent year on year, 7.1 percentage points lower than the decline in the first quarter. But the figure soon grew by 4.4 percent in the second quarter.
The decline of the service sector narrowed in the April-June period and modern service industries showed robust growth, with added value of the tertiary industry going up 1.9 percent in the second quarter and overcoming a 5.2-percent tumble from January through to March.
Aside from these, market sales of consumer goods gradually improved in the first six months and reached 17.2 trillion yuan, down by 11.4 percent year over year, or 7.6 percentage points slower than the decline in the first quarter.
Looking back at the first half of the year, after the epidemic was brought under control domestically, "retaliatory consumption" was not evident, but "retaliatory savings" were soaring, and the contribution of consumption to the economic recovery was significantly behind the investment engine, said economists from ICBC International. They expect retail sales growth will probably be positive in the third quarter.
Fixed asset investment fell 3.1 percent in the first half of the year, narrowing remarkably from a 6.3 percent decline in the first five months of the year. Investment in high-tech industries went up by 6.3 percent, while that in the first three months went down by 12.1 percent.
The surveyed unemployment rate of the population aged from 25 to 59 in June stood at 5.2 percent, which was 0.2 percentage points lower than that in May. In the first half, 5.64 million jobs were created in urban areas, accounting for 62.7 percent of the full-year target.
In the first half of 2020, China's goods trade, in U.S. dollar terms, contracted by 6.6 percent year on year to settle at 2.02 trillion U.S. dollars. During the same period, exports edged down by 6.2 percent year over year to reach 1.10 trillion U.S. dollars, while imports tumbled by 7.1 percent to meet 930.9 billion dollars.
0 Comments
