China’s economic growth recorded a sharp decline in the second quarter of this year, reaching only 0.4 percent due to health restrictions and the real estate crisis, according to official figures published on Friday.
Thus, China recorded its weakest growth rate in more than two years, which is a measure of the costs imposed on the world’s second largest economy by Beijing’s intolerant approach to Covid restrictions, according to “The Wall Street Journal“.
According to “AFP”, economists closely follow official figures related to China’s GDP, given the country’s weight in the global economy.
This decline was expected, but analysts polled by AFP had expected a more moderate slowdown (1.6 percent).
In the first quarter of 2022, China’s GDP grew by 4.8 percent year on year.
Since 2020, the country has followed a zero-Covid policy, which is to avoid new infections as much as possible thanks to specific isolation measures, extensive checks, imposing quarantine on those who are confirmed to be infected and monitoring their movements.
In the spring, the economic capital Shanghai was closed for two months with the worst outbreak in the country in two years, and the idea of imposing a similar stone for a specific period in May was floated in the capital, Beijing, according to “AFP”.
These measures constituted a severe blow to the economy, forcing a large number of companies, factories and companies to stop their operations, and also put pressure on supply chains.
In June, retail sales, the main indicator of household spending, rose by 3.1 percent over a year, following three consecutive months of declines in one year, and following the third month of a 6.7 percent decline in May.
Industrial production rose by 3.9 percent on an annual basis last month, following an unexpected 0.7 percent rebound in May.
The unemployment rate reached 5.5 percent in June, compared to 5.9 percent a month ago, and the unemployment rate, which includes urban residents and is closely monitored by the Chinese authorities, reached an absolute record level (6.2 percent) in February 2020 at the height of the Covid epidemic before its decline.
Katrina Elle, an economist at Moody’s Analytics in Sydney, said that the high rate of youth unemployment indicates that “companies are not willing to hire new employees and invest in training amid the uncertainty created by the government’s (zero Covid) approach,” adding that “there is a persistent reluctance to regarding investing in the future,” according to the “Wall Street Journal.”
This slowdown in growth comes in a politically sensitive year that is supposed to see, barring surprises, the reappointment of Xi Jinping as head of the Chinese Communist Party in the fall, according to “AFP”.
Last year, China managed to recover from the shock of the first epidemic wave, and recorded a growth of 8.1 percent in GDP for the whole of 2021.