Weak exports, turbulent real estate market, record high youth unemployment: the recovery of the Chinese economy from the corona crisis lost a lot of momentum in the second quarter due to numerous problems. Gross domestic product (GDP) grew just 0.8 percent quarter-on-quarter from April to June, the Beijing statistics bureau announced Monday. This clearly missed the result of the first quarter of 2.2 percent.
“The data indicates that the post-coronavirus crisis in China is clearly over,” said Commonwealth Bank of Australia economist Carol Kong. “We see a weak and faltering recovery.”
Prediction clearly missed
Compared to the same period last year, the world’s second-largest economy, after the US, grew at 6.3 percent, the fastest pace in two years. However, the lockdowns in the economic metropolis of Shanghai and other major cities had dampened the result in the previous year. In addition, the economists’ forecast of 7.3 percent was clearly missed.
Analysts now doubt whether the government’s growth target of 5 percent for the whole of 2023 can be achieved as a whole. “There is now a real risk that the growth target will not be met,” said Alvin Tan of RBC Capital Markets in Singapore.
“We expect monetary easing”
Many experts speculate that the government and the central bank will try to boost the economy with new aid. “We expect monetary easing and targeted fiscal support for key sectors, including real estate and construction, in the coming months,” Goldman Sachs economists expect. “But this extra support will not be a panacea. 2023 looks more and more like a year to forget for China.”
The export world champion is suffering from declining demand abroad, as key markets such as Germany are in recession. In June, exports fell more sharply than ever since the outbreak of the corona pandemic more than three years ago. Another problem is the real estate market, which accounts for about a quarter of the economy. According to calculations by Reuters, real estate investments in June fell by 20.6 percent compared to the same month last year, after minus 21.5 percent in May.
Consumption is also weakening: retail sales grew by only 3.1 percent in June, after an increase of 12.7 percent in May. One reason for the weak consumption could be rising unemployment: the unemployment rate among young Chinese hit a record high of 21.3 percent in June as millions of students and academics have limited job opportunities.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
