Employees work on an assembly line producing loudspeakers at a factory in Fuyang, China’s Anhui province, on June 30, 2023 (AFP/STR)
China saw its growth accelerate in the second quarter, according to official figures published on Monday, which however mask the difficulties of the second world economy, faced with a difficult economic situation and record youth unemployment.
In the second quarter, gross domestic product (GDP) jumped year on year by 6.3%, according to the National Bureau of Statistics (BNS).
This rate of growth, which would make many people envious in most major economies, is however far below the expectations of analysts polled by AFP (7.1%).
And this figure is misleading because the comparison is always made with the same period a year earlier: in 2022, growth had been modest in the second quarter (+0.4%), largely weighed down by the confinement of the economic capital. Shanghai.
From one quarter to another, on the other hand, a more realistic basis for comparison, the growth of the Asian giant has slowed to 0.8%, after an increase of 2.2% over the January-March period.
The post-Covid recovery at the start of the year, which is still slow to materialize in certain sectors, has tended to run out of steam in recent months.
– “Difficult tasks” –
“In the second quarter, this momentum lost steam due to a drop in global demand for (Chinese) goods which weighed on exports, the weakness of the real estate sector and generally insufficient domestic demand”, indicates Economist Erin Xin of HSBC bank told AFP.
The Chinese economy faces “a complex and difficult international situation, and difficult tasks for the reform, development and stability” of the country, admitted to the press a spokesman for the BNS, Fu Linghui.
The unemployment rate for young Chinese aged 16 to 24 thus reached a new record in June, at 21.3%.
The general figure is stable from one month to the next (5.2%) but it only takes into account the unemployed counted in the big cities.
Retail sales, the main indicator of household consumption, experienced a further downturn in June.
The indicator is certainly up over one year (+3.1%) but this rate is much lower than that of May (12.7%).
“Consumption remains a driver of the recovery,” economist Erin Xin of HSBC bank told AFP.
“In certain sectors, in particular services, the recovery has been particularly strong” despite “lower” spending than before the pandemic, nuance Ms. Xin.
– “Skepticism” –
Rare improvement among the indicators published on Monday: industrial production rose in June (4.4%), against 3.5% the previous month.
Analysts were counting on a more moderate pace (2.5%) of this indicator which gives an overview of activity in the industrial sector.
The official figure for growth in China, eminently political and subject to caution, is nevertheless still closely scrutinized given the weight of the second largest economy in the world.
China is aiming for around 5% growth this year, a target that could be difficult to achieve, however, Chinese Premier Li Qiang has warned.
We must “be psychologically prepared to see other signs of serious deterioration in the Chinese economy”, warn analysts from SinoInsider, a firm specializing in China based in the United States.
And to emphasize that the real estate sector, long an engine of the Chinese economy, remains mired in a crisis, which threatens the survival of developers.
This is why, we must “be skeptical of official data”, according to SinoInsider.
To stimulate activity, the central bank has made several rate cuts in recent weeks, at a time when many economists are pleading more for a stimulus plan.
The authorities are currently favoring targeted measures and are refusing to launch such a plan, which would deepen the debt.
New measures on a case-by-case basis are to be expected in terms of “taxation, for housing and consumption”, anticipates economist Lisheng Wang, of the American investment bank Goldman Sachs.
© 2023 AFP
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