2023-07-17 09:14:25
Weak exports, a troubled real estate market, record high youth unemployment: the recovery of the Chinese economy from the corona crisis lost considerable momentum in the second quarter due to numerous problems. The gross domestic product (GDP) grew from April to June by only 0.8 percent compared to the previous quarter, as the statistics office announced on Monday in Beijing. This clearly missed the result of the first quarter of 2.2 percent.
“The data signals that China’s post-coronavirus boom is clearly over,” said economist Carol Kong of the Commonwealth Bank of Australia. “We see a weak and faltering recovery.” Compared to the same period of the previous year, the world’s second largest economy, after the USA, grew at 6.3 percent, the fastest pace in two years. However, the lockdowns in the economic metropolis of Shanghai and other major cities had dampened the result the year before. In addition, the economists’ forecast of 7.3 percent was clearly missed.
Analysts are now doubting whether the government’s growth target of 5 percent for 2023 as a whole can be achieved. “There is now a real risk that the growth target may not be met,” said Alvin Tan of RBC Capital Markets in Singapore.
Many experts are speculating that the government and central bank will try to give the economy a boost with new aid. “We expect monetary easing and targeted fiscal support for key sectors, including real estate and construction, in the coming months,” Goldman Sachs economists expect. “But this additional support will not be a panacea. 2023 is increasingly looking like a year for China.” Forget off.”
The export world champion is suffering from the weakening demand abroad, since the most important sales markets such as Germany are in recession. In June, exports therefore fell more sharply than at any time since the outbreak of the corona pandemic more than three years ago. Another problem is the real estate market, which accounts for about a quarter of the economy.
According to Archyde.com calculations, real estate investments in June fell by 20.6 percent compared to the same month last year, after minus 21.5 percent in May.
Consumption is also weakening: retail sales grew by only 3.1 percent in June, after increasing by 12.7 percent in May. One reason for the weak consumption could be rising unemployment: the unemployment rate among young Chinese reached a record high of 21.3 percent in June, as millions of school and university graduates only have a limited range of jobs.
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