China’s economy grew 3.2% year-on-year in the second quarter this year, returning to growth after a record 6.8% contraction in the first quarter, official data showed Thursday, as the world’s second-largest economy recovered from the Covid-19 pandemic.
The second-quarter GDP growth rate was higher than the median estimate of 2.9% growth. In the first half of the year, China’s GDP declined 1.6% year-on-year.
Monthly economic data reported Thursday show retail sales, industrial output and fixed-asset investment all continued to improve in June. But the recovery is uneven, mainly driven by accelerated industrial production, indicating supply was stronger than demand, according to a Thursday research note by economists at Macquarie Group Ltd. In terms of demand, investment outperformed consumption.
Value-added industrial output, which measures production at factories, mines, and utilities, rose 4.8% year-on-year in June after growing 4.4% in May. By comparison, retail sales, which includes spending by governments, businesses, and households, dropped 1.8% year-on-year in June, easing from a 2.8% decline in May. That is partly because social distancing measures restricted some consumption activities, Liu Aihua, an NBS spokesperson, said at a Thursday press conference.
Fixed-asset investment, a key driver of domestic demand that includes government-driven infrastructure spending, shrank 3.1% year-on-year in the first six months, narrowing from a 6.3% drop in the first five months. The NBS does not provide investment data for individual months.
The decline in infrastructure investment moderated to 2.7% year-on-year in the first six months from a 6.3% drop in the January-to-May period. Investment in real estate development rose 1.9% year-on-year in the first six months, compared to a 0.3% drop in the first five months.