Although China’s exports increased more than expected in June, imports increased much less than expected. The workers shown here are disinfecting a container terminal in Qingdao on July 13, 2022.
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BEIJING – China surpassed GDP growth by 0.4% in the second quarter from a year ago, with no expectations, as the economy struggled to eliminate the impact of Covid controls.
Analysts polled by Reuters had forecast growth of 1% in the second quarter.
Industrial production in June also lost expectations, increasing by 3.9% compared to last year, compared to 4.1% forecast.
However, retail sales in June rose 3.1%, recovering from a previous fall and exceeding non-growth expectations over the previous year. Major e-commerce companies held a promotional shopping festival in the middle of last month.
Retail sales in June saw an increase in spending in many categories, such as cars, cosmetics and medicines. But catering, furniture and building materials experienced a decline. Within retail sales, online sales of physical goods grew 8.3% year-on-year in June, slower than 14% growth in the previous month.
Investment in fixed assets during the first half of the year exceeded expectations, 6.1% more than the 6% forecast.
Global investment in fixed assets rebounded monthly, rising 0.95% in June from May to an undisclosed figure. While investment in infrastructure and manufacturing maintained a similar or better growth rate between May and June, real estate worsened. Real estate investment in the first half of the year fell by 5.4% compared to a year ago, worse than the 4% drop in the first five months of the year.
Unemployment in China’s 31 largest cities fell from pre-pandemic highs to 5.8% in June, but unemployment in the 16-24 age group rose further to 19.3%. .
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The statistics office described the latest economic results as “hard-earned achievements,” but warned of Covid’s “persistent” impact and “reduced demand” at home. The office also noted the rising risk of “stagnation of the world economy” and the tightening of monetary policy abroad.
In the second quarter, mainland China faced its worst outbreak of Covid since the peak of the pandemic in early 2020. Strict orders to stay at home affected the metropolis of Shanghai for about two months, while travel restrictions contributed to supply chain disruptions.
In early June, Shanghai, Beijing and other parts of China were on track to resume normal trade activity. In recent weeks, the central government has cut quarantine times and eased some Covid prevention measures.
But different parts of China have had to re-establish Covid controls as new cases escalate.
As of Monday, Nomura said regions accounting for 25.5% of China’s GDP were under some form of blockade or intensified control. This is an increase of 14.9% a week earlier.
Major investment banks have repeatedly cut their year-over-year China GDP targets due to the impact of Covid controls. Among companies tracked by CNBC, the average forecast was 3.4% at the end of June.
The official GDP target of “around 5.5%” was announced in early March.
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