Chinese Economy Recovers Quickly Despite Steep Decline in Last Quarter
Following a sharp decline in the first three months of the year, Chinese economy showed a sudden growth of 3.2 percent in the second quarter.
Due to the coronavirus pandemic and the lockdowns imposed to curb it, china’s export and imports had fallen down sharply in the early months of the year. But, as per the figures on Wednesday, China’s Gross Domestic Product (GDP) returned to growth during April to June.
As the Chinese economy has now restarted in full swing, the numbers are being monitored closely so as to keep a track on the economic growth of the country. The released figures point towards a V-shaped recovery – a sharp decline followed by a quick recovery. The figure is much higher than the previous predictions of experts and economists.
Like many other countries, China had shut its factories and businesses for the most of the period of the year so as to curb the spread of the virus. While the Chinese economy recorded a steep 6.8 percent slump in the first quarter, the government rolled out quite a few measures to help boost the economy, including tax breaks. The economic downfall in the first quarter was the biggest since the time quarterly GDP records began.
For the first time since 1990, Beijing had announced, in May, not to set an economic growth goal for this year as the country dealt with the economic pressure brought along with the pandemic. As per the data from China’s National Bureau of Statistics, Chinese economy slumped 1.6 percent from January this year till June.
While on one hand the economy started to perform better following the re-opening of factories and industries, on the other hand tensions with Washington started to flare up due to Hong Kong national security law and the South China Sea dispute. Due to this, various analysts were not ready to call the recovery V-shaped.
However, a research note from Deutsche Bank noted that the “V-shaped recovery” was “largely completed”.
“Consumer spending is still below its pre-Covid path, but the remaining gap is largely concentrated in a few sectors – travel, dining, leisure services– where rapid recovery is unlikely,” it added.
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