China leads coronavirus recovery as economy returns to growth
Latest GDP figures show turnaround after record slump in first quarter
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Your support makes all the difference.China has reported a return to 3.2 per cent growth in the second quarter, in one the world’s first major signs of economic recovery from the coronavirus pandemic.
The country’s gross domestic product (GDP) exceeded expectations in the three months to the end of June, according to data from the country’s National Bureau of Statistics.
The rise follows China’s first decline in decades, with GDP dropping by 6.8 per cent in the first quarter of 2020 as the pandemic peaked in the world’s second-largest economy.
China’s strict lockdown measures were eased in April after a gradual drop in reported cases and a hefty stimulus package was put in place to boost the economy.
And while consumer spending remains weak, the rapid return of industrial output as factories and shops reopen means the country has avoided a technical recession, defined as two consecutive quarters of negative growth.
Economists say manufacturing has been key to the turnaround.
“The pandemic is creating winners and losers,” said Bill Adams of PNC Financial Services Group in a report. “Manufacturing is leading China’s recovery.”
Liu Aihua, spokesperson for the country’s National Statistics Bureau, said the figures show China’s economy “has overcome the negative impact of Covid-19” and has gathered “momentum” for the second half of 2020.
Speaking at a press briefing as the growth figures were released, Ms Aihua said China nonetheless was “still faced with growing external risks and pressure at home for economic recovery”.
That appears to be a veiled reference to deteriorating trade relations with the US and Australia, as well as the threat of further international fallout from the imposition of a new security law on Hong Kong.
China had abandoned growth targets in May for the first time since records began in 1990, citing uncertainty over world trade and the economy.
Last year, the growth target was set at 6 to 6.5 per cent.
The world has been watching China, the country where coronavirus first emerged, as it steers towards recovery while the virus continues to spread in Europe, the US and South America.
Other countries are yet to release their GDP figures for the second quarter (UK figures are due on 12 August), but the growth outlook remains bleak around the world.
Advanced economies are expected to see the biggest collective slump, according to the International Monetary Fund (IMF).
The IMF downgraded its global growth projections in June to forecast a decline in GDP of 8 per cent in advanced economies and 3 per cent in emerging economies.
China was predicted by the IMF to be the only G20 nation to see a rise in GDP this year.
Chart provided by Statista
Additional reporting by Associated Press
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