Beijing (AP) - After a record start to the year, China's economic growth slowed somewhat in the second quarter. The second largest economy behind the USA grew by 7,9 percent year-on-year from April to June, as the Beijing statistics office announced on Thursday.
China has long since overcome the pandemic, which is why the economy is booming. The new growth figures are in line with expectations, but are lower than in the first quarter, when the economy grew by a record 18,3 percent year-on-year.
Unusually large increase
The unusually large increase was explained at the time by the fact that the economy had collapsed sharply in spring 2020 due to the Corona crisis, which means that the comparative value was low. Now, according to experts, growth is about to return to the pre-pandemic long-term trend. All in all, growth in the first half of the year was 12,7 percent.
"In general, the economy has steadily recovered in the first half of the year," it said in the statement from the statistical office, which also warned of uncertainties. The unpredictable development of the pandemic, which is on the rise internationally, was named as a risk. Outbreaks in other parts of the world could quickly affect China's trade.
Increasing domestic demand
The World Bank recently estimated that the Chinese economy could grow by 8,5 percent for the year as a whole. Both the confidence of consumers and companies have recently improved further, which is why better labor market conditions and increasing domestic demand can be assumed. According to the forecast, China's exports should also develop well.
The Chinese government is more cautious and set its official growth target in the spring of “over 6 percent”.
The “zero covid strategy” is paying off
The government in Beijing is pursuing a “zero covid strategy”. With curfews, mass tests, contact tracing, quarantine and strict entry restrictions, the country has the coronavirus largely under control. There have been only a few, minor outbreaks since last summer, allowing the economy and everyday life to return to normal.
Other data presented on Thursday also showed a largely stable development. Industrial production, a measure of activity in the manufacturing sector, rose 8,3 percent in June year-on-year. Retail sales rose 12,1 percent. Both values were above expectations.
Impressive foreign trade figures
China had already presented stronger than expected figures for foreign trade on Tuesday. Exports rose by 32,2 percent year-on-year. Imports even increased by 36,7 percent.
German corporations are also benefiting from the recovery in the Chinese economy. Many companies that are active in China have enjoyed lavish profits over the past six months. According to a survey by the EU Chamber of Commerce published in June, the companies benefited from the fact that China was able to overcome the pandemic faster than other regions of the world and that the economy picked up speed again last year.