China’s Economy Grew 3.2%, Rebounding from Coronavirus
Economic News: China reported that its GDP grew by 3.2% in the second quarter of 2020 compared to the previous year. The growth beat analysts’ expectations and rebounded from the first quarter’s decline.
The growth comes after China eased lockdown and rolled out stimulus measures to prop up its economy.
According to a Reuters poll, economists expected the GDP to have grown modestly, at 2.5% in the April to June Quarter.
China’s Quarter-1 GDP contracted by 6.8% in 2020 from last year. This was while the world’s second-largest economy took a hit from the coronavirus pandemic.
The decline was China’s first since 1992, when official quarterly records started.
China’s official GDP figures are an indicator of the economy’s health, but many experts have expressed skepticism about their veracity.
On Thursday, China’s National Bureau of Statistics said in a press release that the national economy overcame the pandemic’s adverse effects in the first half of the year. The growth was gradual and demonstrated its development’s resilience and vitality.
China has introduced measures to boost the economy. This includes fiscal spending, cuts in lending rates, and reduced banks’ reserve requirements (the amount of money banks must hold in reserve)
Signs of recovery
Some recent data shows signs of recovery. Data on trade showed growth in China’s dollar-denominated exports and imports.
Two different sets of surveys showed that manufacturing activity also grew compared to May.
Before the data release, Bo Zhuang said Chinese exports have been getting a massive market share while the rest of the world is locked down. China started easing lockdown before other countries.
Bo Zhuang is the chief China economist at TS Lombard.
Bo Zhuang also said he expected China’s GDP recovery to be sustainable in at least the next two quarters as the domestic economy seems to be doing well as the growth in infrastructure and cross-provincial travel reopened.
According to Bo Zhuang, a recovery of about 5% in the next two quarters was foreseeable. China’s 2019 full-year GDP growth was 6.1%.
Still, there are challenges ahead, as the coronavirus outbreak first emerged late last year in Wuhan and spread globally. According to Johns Hopkins University, the virus has infected more than 582,000 people in China.
China’s National Bureau of Statistics acknowledged the risks and said China’s economic recovery was still under pressure. The pandemic has primarily impacted the global economy, noticeably mounting external challenges and risks.
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