With the outbreak of the corona virus in China, the economy of the world's largest trading nation came to an almost complete standstill. Analysts hope that the crisis has bottomed out: China's economy is recovering – if only tentatively.
The economic downturn for China was historic after the outbreak of the corona virus in the city of Wuhan. But the minus of the past months is slowly giving way to slight growth. Analysts see this as a clear sign of a recovery. However, Chinese companies are still struggling to survive.
As the Beijing Statistics Office reports, the economy grew significantly in the second quarter by 3.2 percent compared to the previous year. For the first time since official records began in 1992, China experienced negative economic growth of 6.8 percent in the first quarter due to the corona pandemic. The bottom line is a decrease of 1.6 percent in the first half of the year, as the statistics office further reports.
The growth in the second quarter is still delicate by Chinese standards. The economy of the People's Republic had grown by 6.1 percent last year. Against the backdrop of the global corona pandemic, analysts still see the new growth figures as a clear sign of recovery.
State aid measures are having an effect
China's economy is picking up again because the country has largely brought the corona pandemic under control. There are hardly any new infections today, so that life and economic activities normalize again. The upswing in China is driven by domestic demand and an increase in industrial production and services. The support measures that the government initiated due to the Corona outbreak are clearly noticeable.
The new figures for foreign trade made it clear that things are slowly picking up again: exports and imports of the largest trading nation were up again for the first time in June. Exports in US dollars increased 0.5 percent compared to the same period last year. Imports grew unexpectedly strongly by 2.7 percent. Experts had actually expected a sharp drop in imports as in the previous months.
Despite the improvement, China's economy must continue to adjust to risks that are difficult to calculate. For example, experts mention the uncertainties caused by the US-China trade and technology disputes and a possible further decline in the global economy. Many companies continue to struggle to survive, millions of people are unemployed. There is also a risk of a new corona wave in autumn or winter when the weather cools down.
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