China’s economy is slowing down since the start of the pandemic


A 0.4 percent growth in the second quarter is the weakest performance since the first coronavirus outbreak in Wuhan.

China’s economy grew at the slowest pace since the start of the COVID-19 pandemic in the second quarter, highlighting the heavy economic toll from Beijing’s rigorous “dynamic zero COVID” strategy.

The world’s second-largest economy grew just 0.4 percent year-on-year between April and June, as lockdowns across the country suppressed industrial production and consumer spending.

The result was well below market expectations and the worst performance since the first quarter of 2020, when the economy shrank by 6.9 percent after authorities imposed the first COVID-related lockdowns in Wuhan city.

“The data was weaker than expected, with most analysts expecting around 1 percent,” Carlos Casanova, senior economist for Asia at UBP in Hong Kong, told Al Jazeera.

“We were below consensus as we expected the decline in China’s housing sector to affect aggregate demand, reducing the likelihood of a sharper consumption recovery in June.”

Casanova said he expected growth to remain below 4 percent by 2022.

Major cities, including the commercial capital Shanghai, were put on lockdown in March and April as part of a ‘zero COVID’ policy that aims to eradicate the virus at almost any cost.

Although officials have since lifted many of the strictest curbs, new restrictions have been introduced in recent weeks that affect millions of people in Xian, Lanzhou, Haikou, Macau and Anhui provinces.

Despite the mounting economic and social toll, Chinese President Xi Jingping has pledged to maintain the country’s zero-tolerance approach and emphasizes the need to “put people and life first.”

China has set an economic growth target of about 5.5 percent for 2022, which economists widely believe is unlikely to be met.

Source link


Please enter your comment!
Please enter your name here