China’s first-half GDP rises 2.5% as economy faces mounting challenges
GDP Photo: VCG
China’s economy has braved a series of challenges posed by national COVID-19 outbreaks and deteriorating global environment, posting 2.5 percent year-on-year growth in the first half of 2022, official data showed on Friday. .
The expansion of the world’s second-largest economy is fueled by a rapid resumption of economic activities after epidemics in major cities were effectively contained under the country’s aggressive zero-COVID strategy and the effective execution of a series of growth-enhancing measures, analysts said. out.
China’s GDP growth, although slowing from the first quarter largely due to the impact of COVID-19, was mostly in line with market expectations and provides a bright light to the global economy that is mired in a series of problems, from the pandemic to the Russia-Ukraine conflict to the impending economic crises in many countries around the world, including the United States, experts said.
In the first half of the year, China’s GDP rose 2.5 percent year on year to 56.3 trillion yuan ($8.3 trillion), the National Bureau of Statistics (NBS) said on Friday. In the second quarter of 2022, when the country faced severe COVID-19 outbreaks, GDP grew 0.4% year-on-year, the slowest pace since the 2020 outbreak, from 4.8 % in the first quarter of the year.
Fu Linghui, spokesperson for the NBS, said Friday that the effects of a series of economic stabilization policies are clear, as the Chinese economy has overcome the negative impact of unexpected factors to show a stabilizing trend and to improvement. In particular, China achieved positive economic growth in the second quarter and stabilized the economic situation. It is not an easy step to take.
Downward pressure on China’s economy increased significantly in the second quarter due to a surge of COVID-19 in major Chinese cities, particularly its economic hub Shanghai, University professor Cong Yi said on Friday. finance and economy of Tianjin. .
“However, the positive growth in the second quarter following a strong rebound in June indicated the resilience of the Chinese economy to recover quickly from the epidemic shock,” Cong said.
Key macroeconomic data for June also pointed to a strong rebound in the economy after China emerged from the worst virus outbreak since the start of 2020, with industrial production picking up speed and consumer confidence improving. .
Value-added output by large industrial firms rose 0.7% in the second quarter, matching growth in May. Value-added industrial production rose 3.4% in the first half of the year.
“The June rebound was largely due to the fundamentals of the Chinese economy and the stability of the Chinese production system. Once we can get production back in order, an economic rebound will follow,” Cong said.
Retail sales, the main indicator of consumption, fell 4.6% in the second quarter, narrowing the gap from a 6.7% drop in May, according to BNS data. It rose 3.1% year-on-year in June.
The rebound in consumption comes after central and local governments introduced measures to boost consumption, particularly the revival of the auto sector, Cong said.
China produced 2.499 million cars and sold 2.502 million units in June, up 28.2 percent and 23.8 percent year on year respectively, according to data released Monday by the China Association of Automobile Manufacturers.
Investment in fixed assets, an important pillar of economic growth, also rose 6.1% in the first half of the year. It accelerated its growth in May and June, posting growth of 4.6% and 5.6%, against 1.8% in April.
Investment in fixed assets has accelerated thanks to the accelerated allocation of special purpose bonds to stimulate investment, experts said.
According to the Ministry of Finance, the annual quota of local special bonds should be issued by June. A total of 1.93 trillion yuan ($285.3 billion) of local government bonds were issued in June, up 143.27 percent year on year and 60.11 percent from May.
In addition, a decision was made at a State Council executive meeting on June 29 to use policy and development financial instruments to raise 300 billion yuan ($44.4 billion) through the issue of financial bonds, which will be used to supplement the capital of major projects. .
The trade sector also showed a brighter than expected growth trend. China’s foreign trade showed resilient growth of 9.4% in the first half of the year, driven by a rebound in imports and exports in the Yangtze Delta region, which rose 9.3% in the first half of the year. first half as the economy rebounds from the Omicron shock, according to data released by the General Administration of Customs of China on Wednesday.
Observers said the slew of favorable numbers signals that China’s economy bottomed in the second quarter and expects a strong rebound for the second half of the year, also paving the way for China to come closer. of its annual growth target of 5.5%.
Output and recovery in manufacturing and export growth are expected to continue in the second half as confidence in China’s economic growth is solid, Cong said.
According to him, to achieve the growth target of 5.5%, the government must intensify its political efforts, in particular to stimulate consumption and accelerate investment in infrastructure in the second half of the year.
Wei Jianguo, vice president of the China Center for International Economic Exchanges (CCIEE) and former vice minister of commerce, told the Global Times on Thursday that China’s economy will have the opportunity to leap towards the set target of about 5 ,5.
“Foreign trade in the second half of the year will likely continue its momentum in the first half with double-digit growth expected. Meanwhile, with the recovery of investment and consumption in the second half, the Chinese economy will probably be able to meet the annual GDP growth target of around 5.5%,” Wei said.