the economy of China grew a little less than expected in the second quarter, pressured by higher raw material costs and by new Covid-19 outbreaks, as expectations rise that authorities may have to do more to sustain the recovery.
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O China’s Gross Domestic Product rose 7.9% yoy in the second quarter of 2021. In comparison with the previous quarter, the Chinese GDP showed an increase of 1.3% between April and June and, in the first half of this year, the expansion of the indicator was 12.7%.
Growth slowed significantly from a record 18.3% in the first quarter, when the annual rate was heavily affected by the drop caused by Covid-19 in the first quarter of 2020.
As retail sales it’s at industrial production grew more slowly in June, with the industry hit by a sharp drop in motor vehicle production, while agency data also showed a weakening China’s property market, an important driver of growth.
But June’s activity data still beat expectations, providing some relief to investors worried about a slowdown after the central bank announced a monetary easing last week.
“The numbers were marginally below our expectation and the market’s expectation, (but) I think the momentum is still quite strong,” said UOB economist Woei Chen Ho.
“Our biggest concern is the uneven recovery we’ve seen so far, and for China the recovery in domestic consumption is quite important…retail sales this month were strong and that may alleviate some concerns.”
Average growth in the second quarter in 2020 and 2021 was 5.5%, against an average of 5% for the first quarter, according to the National Bureau of Statistics.
In the quarterly comparison, GDP expanded 1.3% between April and June, against expectations of a 1.2% increase in a Reuters survey. The agency revised down the growth in the first quarter over the fourth to 0.4%.
“The domestic economic recovery is uneven,” said Liu Aihua, an agency official. “We also need to see that the global epidemic continues to evolve, and there are many external instabilities and uncertainty factors.”
The agency’s data showed that China’s industrial production grew by 8.3% in June year-over-year, down from 8.8% in May. Economists had expected a 7.8% advance.
Retail sales advanced 12.1% year-over-year in June, against an expected 11.0% gain after rising 12.4% in May.