China Economy Recovers At Faster Than Expected Pace
China’s economy rebounded at a faster-than-expected pace in the second quarter underpinned by strong industrial output as global economies attempt to recover from the unprecedented downturn posed by the coronavirus pandemic.
Data published by the National Bureau of Statistics showed that gross domestic product grew 3.2 percent on a yearly basis in the second quarter, in contrast to the 6.8 percent contraction logged in the first three months, which was the first fall since 1992. GDP was expected to grow 2.5 percent.
Quarter-on-quarter, GDP expanded 11.5 percent in the second quarter, also faster than the expected growth of 9.6 percent.
“Given the continuous spread of the epidemic globally, the evolving huge impact of the epidemic on the global economy and the noticeably mounting external risks and challenges, the national economic recovery was still under pressure,” the NBS said.
Driven by high-tech manufacturing and equipment production, industrial output climbed 4.8 percent annually in June, faster than the 4.4 percent growth seen in May and the 4.7 percent rise economists had forecast.
Retail sales continued to decline in June, but the pace of decrease slowed to 1.8 percent from 2.8 percent in May. This was the fifth consecutive drop in retail sales. Economists had forecast a 0.3 percent rise.
In June, the surveyed unemployment rate fell to 5.7 percent from 5.9 percent in May.
In the first half of 2020, fixed asset investment decreased 3.1 percent compared to a 6.3 percent drop in the first five months of the year. Investment was forecast to fall 3.3 percent.
In the first half of the year, industrial output fell 1.3 percent and retail sales were down 11.4 percent.
The monthly activity and spending figures show that growth was still accelerating heading into the third quarter on the back of strong policy stimulus, Julian Evans-Pritchard, an economist at Capital Economics, said.
Another report from NBS showed that house prices in the first-tier cities increased 0.6 percent in June. Prices in 31 second-tier cities gained 0.9 percent and advanced 0.8 percent in 35 third-tier cities.