Post by account_disabled on Mar 9, 2024 3:55:39 GMT -5
The Asian giant's economy contracted in the second quarter, compared to the January-March period as a result of restrictions established by the government to combat coronavirus outbreaks that affected Shanghai and other major cities.
The world's second-largest economy contracted 2.6%, down from an already weak 1.4% in the previous quarter, according to official data released today. Compared to a year earlier, growth fell to 0.4% from 4.8% in the previous quarter.
The control measures also Ecuador Mobile Number List involved the closure of the port of Shanghai, the busiest in the world by volume of goods, as well as other important industrial centers since the end of March, which in turn affected world trade. Additionally, millions of families were confined to their homes, depressing consumer spending.
Since May, factories and other companies have already been allowed to begin reopening, but before activity returns to normal it will take time and the effect on maritime transport will be noticeable in the coming months.
This drop in activity also hurts China's trading partners by contracting demand for imported oil, food and consumer goods.
China's infection numbers are relatively low, but the government responded to its largest outbreak since the start of the pandemic in 2020 with a "zero COVID" policy that involves isolating all people who test positive and has ended the quarantine declaration of individual buildings and entire neighborhoods covering areas of millions of people.
To alleviate the effect of these control policies and help companies recover, the government has promised tax refunds, free rent and other aid, but most analysts, such as the firm S&P Global Market Intelligence, expect that China will not reach the growth target of 5.5% for this year estimated by the government.
Despite the second quarter figures, growth in the first half of the year was 2.5% compared to the previous year, but it is still one of the weakest levels in the last three decades. In detail, retail sales fell 0.7% compared to the previous year in the first half, following the 11% drop recorded in April.
Investment in factories, real estate and other fixed assets increased by 6.1%, reflecting the government's effort to stimulate growth by increasing spending on public works construction and other capital-intensive activities.
China also faces headwinds due to weak global demand, although exports increased 17.9% in June compared to the previous year, but this data is relative to goods that arrived before the restrictions, so that upcoming data is likely to indicate contraction.
On the other hand, slowing growth in the United States and Europe could weaken demand for China's manufacturing exports.
This country recovered quickly from the pandemic in 2020, but activity weakened as the government tightened controls on borrowing in the real estate sector, which supports millions of jobs, in turn affecting overall economic growth.