July 17 (UPI) — China said Monday that economic growth slowed in the second quarter to 0.8% from 2.2% in the January to March period as the effects of an initial burst of growth unleashed by the reopening of the economy after COVID-19 faded.
Year-on-year, growth accelerated to 6.3%, up from 4.5% in the first quarter, led by a rise in industrial, manufacturing, services and agricultural output but a weakening property market and exports all weighed on the short-term performance of the economy, according to preliminary estimates published by the National Bureau of Statistics.
GDP topped $4.15 trillion in the first quarter but only $4.3 trillion in the second quarter with trade falling by around 6% in June alone, led by an 8.3% fall in exports to just $280 million and imports down 2.6% to $209 million.
Investment in real estate development fell sharply in June, down 7.9% on a year-to-date basis compared with a 5.8% fall in the January to March period, as supply continued to far outweigh demand.
Unemployment among adults fell slightly from 4.3% to 4.1% but among 16-24-year-olds it surged to 21.3%, up from 19.6%, but inflation fell from an already low 1.3% in the first quarter to 0.7% raising the specter of deflation. Core inflation, which strips out the prices of volatile goods including food alcohol and tobacco, also fell.
The bureau said the economy had “shown good momentum of recovery” thanks to a focus on promoting high-quality development, better-balanced domestic and international imperatives, coordinating COVID-19 prevention and control with economic and social development, and prioritizing stable growth, employment and prices.
“As a result, the market demand gradually recovered, production supply continued to increase, employment and price were generally stable, and residents’ income grew steadily. The national economy showed a good momentum of recovery,” the bureau said.
The Communist Party is aiming to grow the economy by 5% in 2023, a modest target compared with the pre-2020 era when growth routinely ran 6%-7%. The party is trying to balance the reopening of its $16 trillion economy — the world’s second-largest — following three years of pandemic-related shutdowns and restrictions, which were lifted in December.
