Chinese GDP grows 3.2% in second quarter

Chinese GDP grows 3.2% in second quarter

China’s economy returned to growth in the second quarter, in one of the world’s earliest signs of recovery from the fallout of the coronavirus pandemic.

Gross domestic product grew 3.2 per cent in the three months to the end of June, compared with the same period last year, exceeding forecasts.

The figures follow the first annual decline in decades in the previous quarter, when China’s GDP fell by 6.8 per cent as the country struggled to deal with the impact of the coronavirus pandemic.

The return to growth coincided with a period when new reported cases of the virus had fallen sharply, and against a backdrop of state support for the country’s industrial sector even as consumption remains weak.

Liu Aihua, spokeswoman for the country’s National Statistics Bureau, said the figures “demonstrated a momentum of restorative growth and gradual recovery”.

“We are confident on the economic recovery in the second half of this year,” she added.

New data from China, where coronavirus was first discovered, is being closely watched as other economies grapple with the effects of a global crisis.

Despite local outbreaks of the virus, including last month in Beijing, new daily cases have typically remained in the tens per day in the second quarter at a time when the pandemic has gathered pace in the US, Europe and Latin America.

In April, China eased lockdown measures in Wuhan, the original centre of the virus, but has continued to enforce strict rules on testing and closed off the country to most international flights.

Rising GDP in the second quarter was helped by strong industrial production, which increased 4.4 per cent compared with the same period a year earlier and rose in each of the past three months.

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The Chinese state has supported industrial activity over recent months, in part through increasing the amount local governments can borrow for infrastructure projects. A rise in construction has helped boost the country’s steel output when production has shrunk in other big national producers.

Real estate investment was up 1.9 per cent year-on-year in the first six months of the year. Until May, it had been down compared with last year.

Retail sales fell by 3.9 per cent, signalling an uneven recovery and continued pressure on consumption. The unemployment rate in June was 5.7 per cent, a slight improvement on May’s figure of 5.9 per cent.

Stock markets in Asia-Pacific were little changed following the GDP data release. The CSI 300 index of Shanghai- and Shenzhen-listed stocks was up 0.1 per cent, while Hong Kong’s Hang Seng index was down 0.2 per cent.

Additional reporting by Alice Woodhouse in Hong Kong