The Chinese economy experienced modest growth in the second quarter of 2021, with production up 7.9% compared to a second quarter of 2020 still marked by the effects of the Covid-19 pandemic, slightly below economists’ forecasts , who bet on 8.5% increase. Chinese exports continued to drive growth, but rising commodity prices weighed on corporate profits, and household consumption remains subdued. With these mixed figures, China should continue to navigate between supporting growth and managing debt.
For the National Bureau of Statistics, these figures show that the economy is continuing its “ solid recovery “, said a spokesperson on Thursday (July 15th). But the Chinese institution warns: “There remain a lot of external uncertainties, and the domestic recovery remains unbalanced. Efforts are still needed to consolidate the foundations for a stable recovery and development. “ After a year 2020 marked by the pandemic, the annual comparison of growth does not make much sense: in the first quarter, it rose to 18.3%. The quarterly comparison is more interesting: from April to June, GDP grew by 1.3%, above the 0.4% increase of the previous quarter, marked by a return of restrictions to control several households epidemics, “But below the 1.6% average quarterly growth for the second quarters between 2015 and 2019”, Peking University finance professor Michael Pettis notes on Twitter.
“Difficult to be optimistic”
To see the glass half full is to look at the figures by sector, some of which are very encouraging. Exports thus continue to reach record levels: + 32.2% in June, + 27.9% in May. Global demand for products made in China continues to drive Chinese factories, despite logistical difficulties (shortage of containers) and rising raw material prices. Other positive figures: retail sales, a measure of consumption, rose 13.9% in the second quarter, and fixed capital investments rose 12.6%, exceeding economists’ expectations in both cases .
“In China, due to low tolerance to the virus, even the slightest occurrence has resulted in strict local restrictions and undermined confidence. »Louis Kuijs, Oxford Economics
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