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China’s economic growth slowed in second quarter – News

Beijing — China’s economic recovery slowed in the second quarter, but continued to show extraordinary resilience for over a year after most of the coronaviruses in the border were controlled.

Chinese factories could achieve higher-than-expected production in another quarter while consumers outweigh lower expectations, and domestic spending could play a bigger role in sustaining momentum in the coming months It raises the expectation that there will be.

Overall, the Chinese government said Thursday that gross domestic product increased 7.9% year-on-year, in line with economists’ expectations.

Its growth rate is GDP surge of 18.3% year-on-year in the first three months of 2021No one expected the Chinese economy to sustain its growth pace as the statistical distortions of last year’s pandemic crisis diminished.

Second-quarter growth helped boost China’s economy by 12.7% in the first half of this year compared to the first half, which was hurt by the 2020 pandemic.

Under heading GDP figures, higher-than-expected measurements of June factory output, retail sales, and fixed investment data speculate that Beijing will intervene more strongly to maintain growth momentum in the second half. May calm the rise of. Year.

Last week, in a move that surprised many in the market, Beijing moved to free more liquidity in the banking sector for lending, Alluding to high levels of concern About the slowdown of economic activity.

However, no further stimulation may be needed. Growth in the first half was 12.7%, and policymakers seem to have plenty of cushioning to reach their full-year growth target of at least 6%, even if the economy slows significantly in the second half.

Given the myriad uncertainties about the coronavirus pandemic and global recovery, Beijing has paid attention to managing its economic expectations this year.

Earlier this year, a man is working at a construction site in Shanghai.

Alex Pravevsky / Shutterstock

The growth target of more than 6% set by Chinese Prime Minister Li Keqiang in March was widely regarded by economists as conservative. Many forecasters expect China to easily record growth of more than 8% this year, given the low comparison criteria since 2020.

Beijing has also resumed long-term efforts suspended by the pandemic, rising debt levels, house price runaway, Aging population..

Today, the unexpected second-quarter resilience allows Beijing to sustain relatively rapid growth while addressing these long-term issues.

Economic power can be seen throughout the spectrum. Industrial output increased 8.9% in the second quarter and 8.3% in June, higher than expected, according to data released by the National Bureau of Statistics on Thursday.

Retail sales, a key indicator of consumer spending in China, were higher than expected, rising 13.9% in the second quarter and 12.1% in June.

Fixed asset investment rose 12.6% in the first half of this year, again above expectations.

According to the Statistics Bureau, the survey unemployment rate in urban areas of China was a major indicator of the unemployment rate, and was stable in June at 5.0%, the same as in May.

Thursday’s numbers came after the export data released earlier in the week. This is the mainstay of recovery that has so far brought about monthly outperformance. Better than expected in June..

Despite growing geopolitical tensions, the number of companies emphasizes the attractiveness of the Chinese market to US companies.

Levi Strauss

& Co, an American blue jeans maker. Reported a higher-than-expected quarter in the three months to May 30, partly due to higher sales growth in China than pre-coronavirus infection levels.

Charles Berg, president and chief executive officer of Levi Strauss, said this month that quarterly sales in China shifted to an online channel that the company calls “one of the biggest growth opportunities.” , Said it increased by 3% from the same period in 2019. .. ”

People will overtake electric cars at Beijing shopping centers earlier this year.

Tinshwan / Reuters

Northern Technologies International Co., Ltd.

Net sales of its Chinese subsidiary, a manufacturer of biodegradable plastics and anti-corrosion products, rose 30.7% from the previous quarter, a record high for the most recent period ending May 30.

“We expect China to become the largest geographic market next year,” said CEO Patrick Lynch earlier this month.

Based in Circle Pines, Minnesota, the company is investing $ 6.2 million this month to acquire a new facility in Shanghai to support its operations in China.

Not everyone benefits so much. Guangzhou C & Y Filter Co is a small filter manufacturer with two production lines in southern Guangdong, China. Sherry Cai, sales manager of the company, said the rise in raw material prices this year revealed profits, despite stable customer demand.

“Rising raw material prices are the biggest problem we face this year,” Kai said, with prices of filter paper imported from South Korea rising nearly 30% in the first half of this year.

In addition to soaring raw material prices, the company faces a shortage of shipping containers and rising yuan, making its products less competitive in the global market.

“The rate of return on our products is only 10%. If the cost increases by 30%, we cannot pass on all the increase to our customers,” Kai said. “We have to bear the cost.”

Write to Jonathan Chen [email protected]

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